Semiconductor Equipment - Berenberg Bank

ASML Holding NV
Technology Hardware
The quasi-monopolist in the lithography market
The lithography market today has three players: ASML, Nikon and Canon. In
2012, ASML held a 74% market share by revenue – compared with Nikon’s 15% –
and a 66% market share by shipment (see Figures 2 and 3). ASML focuses on the
high end of the market and ships 86% of the most-advanced ArFi tools, which
have an average selling price of €40m. Nikon and Canon mainly ship legacy tools,
which cost €5m-10m each. Nikon lags ASML in ArFi tool development, which is
the current mainstream lithography tool used by chip-makers. Nikon shipped its
first ArFi tool in Q1 2009, whereas ASML started shipping in 2004. Canon only
supplies legacy KrF and i-Line tools, and has no ArFi product.
ASML will not, in our opinion, lose market share in the future. Lithography tools
are usually fully integrated into chip-manufacturing process, so a manufacturer that
wants to switch tool vendors must reconfigure its process and incur a significant
initial service cost.
Figure 2: Lithography market share by revenue
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1996 1998 2000 2002 2004 2006 2008 2010 2012 2013E 2014E 2015E 2016E
ASML Nikon Canon
Source: Company data, Company data, Berenberg estimates
Figure 3: Lithography market share by shipment
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Nikon ASML Canon Lithratoch-Stepper ISI
Source: The Information Network
We believe EUV and ArFi tools will continue to be the mainstream lithography
tools used by chip-makers for the foreseeable future, and generate the majority of
the industry’s revenue. At the same time, legacy tools will be phased out slowly
over the next four years.
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