What's going on?
ASML – which has an effective monopoly over certain chipmaking equipment – is hard to miss right now: the firm posted better-than-expected results on Wednesday, and its shares climbed 4%.
What does this mean?
The global chip shortage is spreading like wildfire, and it’s having a serious impact on everything from car manufacturers to electronics makers. But one industry’s crisis is another industry’s opportunity, and chipmakers – which can now charge a lot more for their in-demand products – are sitting squarely in the latter camp. And given that those chipmakers need the right gear to meet demand, ASML’s pitching a tent too: not only did the supplier to Intel and Samsung see its quarterly results come in well ahead of analysts’ expectations, it even lifted its sales forecast for the rest of the year.
Why should I care?
The bigger picture: Your country needs… ASML.
The shortage is also making governments around the world rethink their dependence on overseas chipmakers. So crucial are semiconductors to major industries that Europe, the US, and others are keen to rely less on technology provided mostly by Asian firms. Holland’s ASML couldn’t agree more, and it’ll be happy to supply the equipment they need – for the right price, of course.
Zooming out: Apple knows a little chip goes a long way.
A similar idea occurred to Apple last year: the tech giant signaled that while it would keep outsourcing the manufacture of its MacBook chips, it’d start designing them in house. The latest iMac – launched earlier this week – was its first foray into the space, and it’ll be hoping the improvement in the machine’s performance will give it the edge over its rivals.