The excitement in the stock market surrounding Nvidia stock is reflected to varying degrees in its partners. While its chipmaker, TSMC, is slowly ramping up its capitalization, ASML, who supplies the latter with equipment, recently secured the second spot among European public companies, eclipsing the luxury goods and clothing producer, LVMH.
ASML’s Unprecedented Growth
This dynamic growth for ASML is unprecedented, as noted by Bloomberg. Yet, even at its current capitalization of €377 billion, the company still lags behind Danish pharmaceutical titan Novo Nordisk A/S. On the other hand, luxury conglomerate LVMH, which retails accessories under brands like Louis Vuitton, Christian Dior, and others, recently reported a dip in the demand for its luxury goods and has understandably slipped behind ASML in capitalization by about €641 million.
Factors Contributing to ASML’s Rise
Aiding the 8.1% surge in ASML’s stock price yesterday was news of the company’s plan to streamline the delivery of its latest lithographic systems with high numerical aperture (High-NA EUV) to meet the needs of the three largest chip manufacturers by year’s end: Intel, TSMC, and Samsung. Each scanner in this class is priced around €350 million. Considering the high demand for state-of-the-art chip production services, this provides ASML with steady revenue growth prospects. Even if TSMC does not use ASML’s latest generation equipment within the next two years, the chip manufacturer will still need a significant amount of products from this supplier. This is because, this year, TSMC intends to spend over $17 billion on advanced lithography, budgeting for the construction of new facilities and the purchase of new equipment for them.
This post was last modified on 06/07/2024