What happened with ASML today?
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ASML’s machines use light to print the patterns that form chips on silicon wafers. Chipmakers buy them to produce advanced logic and memory chips as well as chips made with more established technologies. ASML is the only manufacturer of extreme ultraviolet (EUV) lithography systems; its TWINSCAN NXE platform is widely used in mass production. Its deep ultraviolet (DUV) systems produce most layers in microchips. Lithography-system sales account for most revenue, with EUV and DUV immersion systems carrying much of that business.
Once machines are installed, customers also pay ASML for service and upgrades that keep them running and improve performance. ASML sells measurement and inspection equipment and software that checks printed patterns and feeds corrections back to the machines, helping customers reduce defects.
Sales depend heavily on a small group of chipmakers and their spending on manufacturing equipment; the two largest customers supply a substantial share of revenue. Production also depends on Carl Zeiss SMT, the sole supplier of critical optical components, whose capacity limits how many systems ASML can build. Export controls require licenses for EUV systems, certain DUV immersion systems and other products, restricting which customers ASML can supply and support.
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ASML hinges on chipmakers’ factory spending and sole supplier Carl Zeiss SMT’s critical optics capacity, while its main deep-ultraviolet (DUV) lithography rivals, Canon and Nikon, are absent from this list.
TSMC’s advanced-node capacity plans directly indicate demand for ASML: it makes chips to customers’ designs and buys ASML lithography systems for its factories.
Applied Materials and ASML both depend on chipmakers’ equipment spending, and compete in tools that control manufacturing and help form complex chip patterns. Applied Materials’ Semiconductor Systems revenue is a useful gauge of the advanced-logic and memory investment that also supports ASML.
Lam Research sells equipment that adds, removes and cleans material on wafers to the same chip factories that buy ASML’s lithography systems. Demand from its foundry and memory customers offers a view of the factory investment that supports both companies.
KLA competes with ASML to sell chipmakers tools that measure wafer patterns and find defects as manufacturing grows more complex. KLA’s Semiconductor Process Control business is the part to watch for demand and competition around ASML’s measurement and inspection tools.
ASML buys semiconductor-equipment subsystems and components from Ultra Clean Holdings, making the company part of its manufacturing supply chain. At December 27, 2024, ASML accounted for more than 10% of Ultra Clean’s gross accounts receivable—the money customers owed it, not its sales.
Nova Ltd. and ASML both sell chipmakers tools and software that measure wafer features and control manufacturing to improve accuracy and yields. Nova’s optical dimensional-measurement products are the closest window into demand for the precision control that ASML also provides.
Onto Innovation Inc. and ASML both sell chip fabricators tools to measure structures, detect defects and control manufacturing, with further overlap in lithography for advanced packaging. Onto’s wafer- and panel-lithography products are worth watching for competition in that packaging market.
MKS Inc.’s demand is tied to semiconductor-equipment investment that also supports ASML: it sells instruments and subsystems, including light-based technologies for lithography, measurement and inspection. Watch its semiconductor business rather than its broader electronics, packaging and industrial markets for that connection.
Ultra Clean Holdings, Inc. earningsUCTT
Ultra Clean supplies equipment subsystems and components to ASML, and its semiconductor-equipment business offers a view of whether supply-chain demand is keeping pace with tool production.
Focus on Ultra Clean’s business serving semiconductor-equipment customers; its accounts receivable are amounts owed, not sales. Stronger demand in that business would indicate more activity in the equipment supply chain, consistent with ASML’s production needs. A decline could point to softer equipment production demand, but Ultra Clean has other customers, and its report alone cannot show whether ASML faces a component shortage. The distinction is between supply-chain activity and ASML’s actual ability to obtain parts.
KLA Corporation earningsKLAC
KLA’s Semiconductor Process Control business overlaps with ASML’s metrology and inspection tools, so its results show demand for this tool category and offer a view of competitive pressure.
Watch demand in KLA’s Semiconductor Process Control business. Growth would show chipmakers increasing spending on measurement and defect inspection, confirming a market for ASML’s related products while potentially signaling stronger KLA competition in overlapping areas. Weakness would point to slower spending on these tools, but would not mean ASML necessarily gains orders. Read the result as both a demand signal and a competitive clue, not as ASML sales data.
