ASML is a Dutch semiconductor equipment manufacturing company that focuses on the production of lithography machines, which are key equipment for manufacturing chips. In the past, ASML's EUV lithography machine was its main revenue**, but with the decline in demand for high-end chips, DUV lithography machine has become ASML's largest revenue business. The Chinese market happens to have a huge demand for DUV lithography machines, so the new CEO of ASML has publicly stated that it will be equipped with more production capacity to meet market demand. Foreign media generally believe that SMIC has chosen the right partner.
As a semiconductor chip manufacturer in China, SMIC has huge market demand and potential. China's demand for semiconductor products is growing, and it has set a chip self-sufficiency target of 70%. At present, SMIC has four 12-inch wafer projects under construction, which will bring a large number of lithography machine orders to ASML. According to the data, in the third quarter of this year, ASML's revenue in Chinese mainland accounted for 46%, compared with only 8% in the first quarter. This data shows that ASML has more and more orders in Chinese mainland, and as long as the production capacity is guaranteed, sales will not be worried.
ASML's new CEO, Christoph Fouquet, will take office on April 24 next year, replacing the current CEO Wennink. Previously, Fuquet served as CFO (Chief Financial Officer) at ASML and is very familiar with the company's operations and market strategy. He also said that Chinese mainland is an extremely important market for ASML, and Fukai made a positive statement at a ** conference.
Fukai said ASML will make two important adjustments in 2024 to meet market demand. First of all, it will be equipped with more lithography machine capacity to meet future market demand. Secondly, more advanced EUV technology will be introduced. One of these two adjustments is likely to be aimed at the Chinese market, that is, to provide more production capacity and increase shipments to meet the needs of Chinese customers. Of course, ASML will still be limited by the rules in terms of technical shipments, and the most advanced EUV lithography machines will still not be able to ship freely, while DUV lithography machines will be shipped within the scope of the license. Even so, ASML's DUV lithography machines are more than enough to handle the needs of most mature chip manufacturing.
It is widely believed that the statement of the new CEO of ASML is good news for the Chinese market. Especially for Chinese chip manufacturers like SMIC, they are already on the right path. Although Fukai did not specify which lithography machine capacity it would equip, according to the Chinese market demand, it is a high probability choice to expand the production of DUV lithography machines with mature processes. After all, DUV lithography machines have become ASML's largest revenue**, and Chinese customers are waiting for product delivery. Foreign media believe that for SMIC, they will usher in a "spring" in the field of mature chips.
In contrast, TSMC has faced some problems with high-end 7nm chips. With the decline in market demand, TSMC's revenue contribution has been declining, and capacity utilization has also continued to decrease. In response to market conditions, TSMC is already planning to cut 7nm prices by 5% to 10% next year. If the price is not reduced, the 7nm chip may really be unattended.
On the contrary, SMIC is vigorously developing fabs with mature processes. They have built 12-inch wafer fabs in Shanghai, Beijing, Shenzhen, and Tianjin, and the demand for mature process lithography machines will continue to increase in the future. ASML's ramp-up market adjustment will enable these factories to acquire more DUV lithography machines, which will be a big opportunity for SMIC.
Although the chips with mature processes are not as eye-catching as those with high-end process chips, almost all smart cars, Internet of Things, and base station module chips on the market have adopted mature processes. SMIC has accumulated a large number of core technologies and is competitive in the competition of mature chips. Therefore, it is foreseeable that they will stand out in the field of mature chips.
The statement of the new CEO of ASML has made the Chinese market full of expectations. Fukai said it will be equipped with more lithography machine capacity and introduce more advanced EUV technology. This is good news for chip manufacturers such as SMIC in China. SMIC is pursuing a mature process, and ASML's DUV lithography machine will be an important partner for them. In contrast, TSMC has encountered some difficulties in the field of high-end chips, and the demand for mature processes is also increasing.
Through ASML's market adjustment, SMIC and other companies will be able to obtain more DUV lithography machines, which will promote the development of China's chip manufacturing industry. Whether it is a smart car, the Internet of Things or a base station module chip, it is inseparable from the support of mature technology. In the game of mature chips, SMIC will surely win more opportunities with the accumulation of its core technologies and the support of market demand.
In short, the statement of the new CEO of ASML has brought new hope to China's chip manufacturing companies. As a semiconductor chip manufacturer in China, SMIC has chosen ASML as its partner, which will usher in new opportunities in the mature chip field. We look forward to the efforts of SMIC and other Chinese chip manufacturers, and the rapid development of China's chip industry to provide more high-quality chip products for domestic and foreign markets."