By The Financial District
Ban On Chip Eqp't Export To China Irrelevant To ASML
Motley Fool has shrugged off the impact of the rapidly developing Chips war between the US and China on ASML's stock valuations in the short term, saying the Dutch chip equipment maker is secure on its perch.
Photo Insert: The latest news indicates that ASML may have to comply with the global tightening controls over the exports of its equipment to China.
In an article, Motley Fool said ASML is on the way up due to the robust planned capital expenditure of foundries in the US, South Korea, Japan and Taiwan and the growing self-sufficiency movement of various economies.
“Considering these factors, we concur with ASML management's statement that the China ban will not significantly change its 2030 outlook,” Motley Fool explained.
The ASML export restrictions began during President Trump's era, when Washington thought of scrimping Beijing’s access to high technology.
This is probably attributed to China's surprising technological advancement in the older 14-nanometer (nm) chips, reaching the globally competitive level of data storage NAND chips.
Another rumor suggests that China has been able to produce 7-nm chips since 2021, using an older generation of deep ultraviolet lithography (DUV), eclipsing Intel's launch in 2023.
No wonder the US government opted for these strategic restrictions to curb China's forward technology to above 14-nm. The US has also pushed for strategic self-sufficiency across multiple sectors, with semiconductor chips being one critical component.
The latest news indicates that ASML may have to comply with the global tightening controls over the exports of its equipment to China, representing a notable headwind to its forward top and bottom-line growth.
The country accounts for 14.72% of the company's revenues in 2021. The number has also been growing notably from 11.59% in 2019, despite previous export restrictions. However, demand from other countries may actually zoom after they got burned waiting for cheaper China-made chips.
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