We live in an era when semiconductor technology has become the main center of technological competition in the major producing countries of the world. In this sense, the central equipment of the production line is the lithography machine, since it is this which allows us to manufacture the wafers with the chips that will later make up our processors, and in this area only the Dutch company ASML is able to follow the uptrend of the market but, to what extent?
ASML’s monopoly power
Most people, including hardware enthusiasts, have no idea how powerful ASML is in the lithography market. In the latest report, released by Bank of China Securities, some data has been provided that will help us get an idea of the scope of power of this Netherlands-based company.
Let’s take a look at the market in 2020: According to announcements from ASML, Canon and Nikon, worldwide sales of lithography machines total 413 units among the three companies, with an increase of 15% year over year on another of shipments, which means this is a growing industry and chipmakers each time need more machines to produce them (this is also good news because this indicates that they are either renovating their machines or increasing their production capacity, that says it all).
Of these 413 units sold in 2020, 258 came from ASML, or 62.5% of the total market share. Canon’s sales were 122 units, around 30%, while Nikon only sold 33, or 8% of the total. However, if we do this same calculation by counting monetary income, ASML would monopolize 91% of the quota, while Canon would keep 6% and Nikon 3% nothing more; In other words, between the two Japanese companies, they do not even achieve 10% market share, while ASML accounts for over 90% of revenue.
There is no real competition in lithographic machines
It is clear that between the two companies competing with ASML in this market, in reality they are not competing for sales or revenue, but the situation is even more shocking as the Canon and Nikon lithographic machines are at a very low price. range compared to ASML’s UVV. machines, considered high-end and the only ones to follow the current market trend, which increasingly requires smaller and more advanced chips.
This means that in addition to what we have already explained in terms of market share at the sales level and at the income level where ASML dominates by far, the Dutch company actually has no other company that manufactures at same level. like them, that is, they literally have no competition in this regard in their product line. It also means that they have a total monopoly in the industry and that many companies depend on it; Obviously, the antitrust law cannot come into force here because in reality it is that there are no companies which manufacture the same products as them, it is literally impossible that they do not have a monopoly because there is no competition.
The bad news about this is that if ASML decides they need more income (things are going pretty well for them in that regard right now as they brought in $ 4.5 billion in revenue last year. ), he could increase the price of his machines, which he would end up having an impact on the chip market. Presumably there the European Union would step in to prevent abuse, but the reality is that the entire semiconductor market is practically in the hands of this company.