analysts say asml's monopoly spells opportunity

2025-03-21 asml

Amsterdam, Friday, 21 March 2025.
seeking alpha reports asml’s euv technology gives it a unique position. the company is crucial to advanced ai chip manufacturing. analysts believe the stock is currently undervalued. they predict asml could outperform expectations into 2026. demand for euv technology may double in five years. this growth is fueled by the increasing need for ai infrastructure. asml’s euv sales are growing, offsetting declines in duv equipment shipments to china.

q4 2024 results

ASML’s Q4 2024 financial results showcased robust performance, driven by strong demand for AI chips [7]. The company, the sole producer of EUV lithography systems, reported impressive figures [7]. Revenue reached €9.263 billion, surpassing market expectations [7]. The gross margin stood at 51.7%, indicating enhanced profitability [7]. Earnings per share (EPS) increased to €6.84, a 100 increase of 29.7% compared to the previous quarter [7]. New orders totaled €7.088 billion, revealing strong revenue potential [7]. EUV equipment orders accounted for €3 billion, driven by expansion from key clients like TSMC and Samsung [7].

market leadership and expansion

ASML’s technological monopoly in EUV lithography is crucial for manufacturing chips smaller than 3 nanometers [7]. TSMC, Samsung, and Intel are actively expanding their production capabilities, ensuring long-term growth for ASML [7]. ASML’s service business, which includes equipment upgrades and maintenance, reached a record €2.15 billion in Q4 2024, a 100 increase of 38.1% year-over-year [7]. This growth provides a stable source of revenue for the company [7]. The surge in new orders, from €2.6 billion in Q3 to €7.09 billion in Q4, significantly exceeded market forecasts, highlighting strong future prospects [7].

taiwanese stock beneficiaries

ASML’s strong performance positively impacts several Taiwanese stocks [7]. These companies benefit from ASML’s growth [7]. Gudeng (3680) is a global leader in EUV photomask pods and closely tied to ASML equipment installations [7]. Marketech International (6196) specializes in semiconductor equipment installation and benefits from ASML’s sales growth [7]. ITD (7556) focuses on manufacturing key components for semiconductor equipment [7]. Gallant Precision (3178) supplies high-precision parts used in semiconductor equipment [7]. Scientech (3413) provides precision machinery for semiconductor equipment manufacturing and collaborates closely with ASML [7].

gudeng’s market position

Gudeng is a leading supplier of EUV photomask pods, holding over 80% of the market share [7]. As ASML is the primary supplier of EUV equipment, the number of installations directly correlates with Gudeng’s revenue recognition [7]. The increasing demand for AI semiconductors is expected to drive Gudeng’s future prospects [7]. In December 2024, Gudeng’s consolidated revenue reached $5.85 billion, a 100 increase of 16.57% month-over-month and 13.02% year-over-year [7]. The company’s chairman anticipates potential to reach $10 billion due to growth in its core business and investments [7].

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stock analysis euv technology