korean firm challenges asml's euv dominance
Seoul, Friday, 27 December 2024.
South Korea’s Samyang NC Chem has started mass production of EUV photoresist materials. This development introduces significant competition for ASML, a leader in EUV lithography. The emergence of a new competitor in the EUV photoresist market might affect ASML’s market share and stock performance. As ASML has long held a dominant position with its sophisticated lithography machines, this move by Samyang NC Chem signals a potential shift in the competitive landscape. The impact on ASML could be substantial, given the strategic importance of EUV materials in semiconductor manufacturing. This development is part of a broader trend of South Korea enhancing its semiconductor manufacturing capabilities, aiming for leadership in advanced processes by 2025. ASML’s response to this new competition could shape the future dynamics of the global semiconductor industry.
Market growth and competition dynamics
The EUV lithography market is experiencing robust growth, projected to expand from USD 12.18 billion in 2024 to USD 22.69 billion by 2029 [2]. Within this expanding market, South Korea is positioned to achieve the highest compound annual growth rate during the 2024-2029 period [2]. Samyang NC Chem’s entry into mass production of EUV photoresist materials on December 11, 2024 [1], represents a strategic move in this high-value sector. This development aligns with South Korea’s broader ambitions in semiconductor manufacturing, supported by significant government financial and policy initiatives [2].
ASML’s market position and financial outlook
Despite emerging competition, ASML maintains its core strength in EUV lithography systems, with machines priced between €150-200 million each [5]. The company projects 2024 revenue around €28 billion, slightly above 2023’s €27.6 billion [5]. However, ASML has adjusted its growth expectations, forecasting 2025 sales between €30-35 billion [5]. The company’s long-term outlook remains positive, with projected annual sales of €44-60 billion by 2030 [5], supported by the semiconductor industry’s anticipated growth to $1 trillion by 2030 [5].
Stock market implications
ASML’s stock has experienced recent volatility, declining 6% through December 19, 2024 [5]. Trading at approximately $715 per share, the stock maintains a price-to-earnings ratio of 28 times 2025 earnings [4]. J.P. Morgan analyst Sandeep Deshpande has set a price target of about $1,150, noting the stock’s unusual value relative to long-term forecasts [4]. The company’s monopolistic position in high-end EUV machines continues to provide a competitive moat, though market sentiment may be affected by the gradual industry recovery extending into 2025 [5].