Re:
By Stephen D. Simpson, CFA
The business of selling the equipment that allows the Intels (Nasdaq: INTC - News) and AMDs of the world to make their chips has always been volatile and cyclical. But if what I'm seeing is accurate, it looks like things are getting even more unstable -- which probably won't be great news for shareholders of companies like ASML Holding.
Who is this Simpson?
CFA?
Is this something like MBE (Member of the British Empire)?
I never heard of him, so he definitly isn’t a lithoguru like Chris Mack.
So expect the unexpected from writers like Simpson who needs to write articles like this to get the money to pay their living.
Now back to business.
He sees things getting even more unstable.
He’s wrong, because foundries and chipcompanies are ordering equipment only when they really need it, when their customers really buy chips.
So, the main driver for this is economic growth.
If this economic growth remains above 3.5% Y/Y, and I see no reason to doubt the words of some economists, the semisector will steadily grow with a rate of 8% to 10% every year, at least until 2015.
This 8% to 10% growth is sufficient for a steady growth for equipment companies like ASML.
ASML is extending its marketshare to 70% in 2010. It’s marketshare is about 56% today.
By the end of next year ASML will have a marketshare in Japan of more than 27%.
Today it’s only 6%.
The growth of this marketshare is a stable foundation for ASML, so mister Simpson, explain to me why you see things getting more unstable. |
