ASML's Dominance in Semiconductor Lithography Drives Growth Amid Surging Chip Demand
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ASML is a Dutch company that makes photolithography equipment used to manufacture semiconductor chips. It has a near monopoly on advanced EUV lithography technology.
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EUV lithography uses extreme ultraviolet light to print tiny circuits on silicon wafers. ASML's machines automate this process for chip foundries.
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Demand for semiconductors is increasing due to AI, data centers, 5G, etc. This benefits ASML as the leading supplier of lithography equipment.
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ASML has strong competitive advantages from capital intensity, vertical integration, and technological leadership in EUV lithography.
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Valuation models suggest ASML stock could have significant upside if growth continues. Some risks are emerging competition and cyclical semiconductor demand.