My guess is they are spending R&D money on better/simpler/cheaper EUV light sources, so expanding production capacity of existing models isn't a great idea.

Specifically my guess (and I'm no expert) is a plasma wakefield accelerator feeding a free electron laser to get tunable wavelength EUV light far cheaper and simpler than what they've got now. Tons of work to do to get there, but that's always been the case in thier business. Also, if they don't do it someone else might and then they'd be dead.

There are other R&D areas to be handled too. One might ask why not spend more on the R&D, but they are probably at some kind of practical limit there too.

> Specifically my guess (and I'm no expert) is a plasma wakefield accelerator feeding a free electron laser to get tunable wavelength EUV light far cheaper and simpler than what they've got now

Don't you think they'll also be using a retro encabulator, with the modial interaction of magneto-reluctance and capacitive directance being used to generate the EUV light?

I honestly can not tell if this is a serious question or a joke throwing around physics techno babble... Maybe this is how business people feel when we try to explain why some data somewhere is out of sync because of system problems.

https://www.youtube.com/watch?v=RXJKdh1KZ0w (:

I've just realized I really need to see this video re-shot next to a Shiny-Looking Thing at an ASML facility, preferably one with glowy lights emanating out of it somewhere.

(I've also just realized at least 10 companies have probably re-shot this internally with their own equipment. Argh.)

Or the original paper.

https://sci-hub.ru/https://doi.org/10.1049/sqj.1944.0033

Almost disappointed you didn't mention a flux capacitor but I guess it would have been too obvious

I was going to mention 'magneto-reluctance' but you covered that as well!

Wish I could upvote tenfold to further increase your customer focus on operator excellence.

Yes, but only if they can prevent side fumbling, using state of the art hydrocoptic marzul vanes.

I don't think that would work... It would probably lead to sinusoidal depleneration.

No we have half spin Allen dampeners for that.

Please stop making me feel like I'm on Reddit

Is anybody close to making that work? The idea was proposed around 2014, but it doesn't seem that anyone has built it.[1]

You can use a big accelerator as a EUV light source. The SLAC beamline was once used to test the concept. Medium sized (160m circumference) synchrotrons have been suggested.[2] One appears to be under construction in China.

A plasma wakefield accelerator is a proposed way to shrink a powerful accelerator down to a more manageable size. Maybe. There's a project underway to use about a third of the 2-mile long SLAC beamline in this mode.

ASML made zapping a droplet of molten tin with lasers work as an EUV source. That's a nightmare. This approach may or may not be better. It involves zapping a high-pressure gas with lasers.

All the known ways to do this are insanely expensive and look more like physics experiments than production equipment.

A clean light source, where you put electricity in and get EUV out, would be easier to work with. There was talk of "table top synchrotrons" a few years back. One startup built one, although it was more like garage-sized.

[1] https://www.cambridge.org/core/journals/high-power-laser-sci...

[2] https://pubmed.ncbi.nlm.nih.gov/35228673/

[3] https://www6.slac.stanford.edu/news/2020-10-12-slac-starts-n...

Cant answer the question and my knowledge is only from 'one interested' but from how long (~20 years) it took to build the current EUV source and how complicated the alternatives look this is for sure no easy feat.

Can recommend [1] as the title say about the light source. Very interesting even for a non professional (and [2] as on high level overview of the machine and [3] as longer documentation inside ASML).

[1] https://www.youtube.com/watch?v=5Ge2RcvDlgw "The Extreme Engineering of ASML’s EUV Light Source"

[2] https://www.youtube.com/watch?v=f0gMdGrVteI "The Extreme Physics Pushing Moore’s Law to the Next Level"

[3] https://www.youtube.com/watch?v=zQu_TMgHO98 "ASML's Secret: An exclusive view from inside the global semiconductor giant"

>plasma wakefield accelerator

Is this named after the town, a person, or just 'wake' and 'field'?

Please be the town. If Wakefield can get in on the plasma accelerator sexyness, there's hope for all boring northern towns.

Dewsbury fusion here we come.

It is not about the town:

https://en.wikipedia.org/wiki/Plasma_acceleration#Wakefield_...

Wait 2 seconds while I edit that...

Which competitor is pushing ASML to spend more on R&D?

China.

It's over 3 years, so would only be 18% of revenue, but that's still massive.

Stock buybacks are equivalent in purpose to dividends. Many investors prefer them because they are not taxable, unlike dividend income.

They are taxable (assuming they turn into stock appreciation which ASML has not been great at for a while) but at a lower capital gains rate.

The buyback event itself is not taxable. For dividends, the recipient must still pay taxes even if they are reinvested (as is common) and this cash flow and tax burden is unwelcome for larger investors.

No. But the whole point of a buyback is that it will presumably cause stock appreciation and that appreciation is taxable, albeit at a lower rate and not until the stock is sold.

Only if you sell and are not using a structure that will shield you from taxes until an actual withdrawal is made. You can also take out a loan using the stock as collateral to avoid being taxed.

In large or complex arrangements the share might never be sold, instead being used as leverage or as part of more complex tax avoidance strategies. Far better than a dividend.

Or just held until death at which point no capital gains taxes are owed

In the US, dividends from stocks held more than a certain amount of time are taxed as capital gains (qualified dividends):

https://www.investopedia.com/terms/q/qualifieddividend.asp

Appreciation on its own is not a taxable event. Only if you sell after said appreciation.

That depends on the tax jurisdiction and circumstances.

In the Netherlands, appreciation is immediately taxable for individuals, but not for corporations.

And what about depreciation?

How does that work in practice?

I presume you don't send a cheque off for €1.36 at the end of the day, (or receive a cheque back after 8 months)

You pay an annual % tax on the value of your investments less debt as of January 1st. This means you still pay taxes if your assets lose value, too. It's a wealth tax that pretends to be a capital gains tax.

Ok. I'd quibble about it being a capital gains tax at all, but anyway.

It doesn't pretend to be a capital gains tax at all. It's a tax on income from assets, which is in practice more or less a 'wealth tax' which is also why it's called the Dutch word for 'wealth tax' in the first place.

It is a tax on an assumed return on assets, determined as a set percentage of wealth. "Vermogensrendementsheffing" means a "tax on return on wealth", not on the wealth itself. In name it is not a wealth tax, but in reality it is, since the assumed return that is taxed has no relation to the true return. This relates to the recent decisions declaring this partially unlawful, see e.g. https://www.tilburguniversity.edu/magazine/supreme-court-net...

You should probably amend this, since this is very misleading to people unfamiliar with the Dutch tax regime. As you are aware, in the Netherlands net wealth (not capital gains / appreciation) is taxable. (Even if you consider the appreciation consequently also taxable, it's certainly not immediate, as the wealth is only assessed once a year).

With the upcoming vermogensaanwasbelasting they'll tax actual gains on stock appreciation.

On the UK we have ISAs that are sheltered from capital gains tax. But not from dividend taxes. The same applies to pensions.

Of course this state of affairs relies on companies not all jumping to stock buybacks, or else the treasury will find some new way of getting their pound of flesh

> Stock buybacks are equivalent in purpose to dividends.

Stock buybacks manipulate the stock price. That's not an equivalent purpose. It even used to be illegal.

ASML depends on lenses from a relatively small company. That company does not have interest in ramping production any more than they already have. They don't care how much money they're offered.

Nobody else can get the job done. So, as they say, it is what it is.

Which company?

Zeiss.

I believe ASML actually owns a huge chunk of Zeiss, no?

ASML own 24.9% of ZEISS SMT, the part of ZEISS which makes the lenses for them.

Zeiss isn’t small lol

It's small by HN/SV tech company standards where companies grow 2000% in workforce per year just to show growth to investors.

Workforce or valuation? It's no secret that these tech companies are over-inflated, at least recently there seems to have been a correction. Companies like Zeiss are much more solid at least.

Both in workforce and valuation. Companies like Zeiss have slower but more sustainable growth, but also don't move fast and break things.

€ 2.298 billion (2020/21) revenue

https://en.m.wikipedia.org/wiki/Carl_Zeiss_SMT

15 years ago, when I was there, Zeiss SMT also did the light sources (discussed elsewhere in the thread), btw, not just supplying the lenses. Don't know if that's still the case. I don't know exactly what the lens/mirror systems for EUV look like, but the "old" 193nm ones were something to behold.

Only a state actor could threaten ASML dominance at this point. They have outlasted all their commercial rivals.

Who were ASML rivals? How long ago did they have viable competition?

Canon and Nikon, but they've not managed to get EUV machines on the market (and I'm not sure how much they're investing in trying again).

Zeiss has more than just SMT (the guys that build the EUV mirrors), they have consumer products, a medical technology arm and one that is working on optical quality assurance and research microscopy. Alltogether 40k employees and around 6 or 7 billion Euros of annual revenue. Small on a global scale, but not that small. Great company for engineers, by the way.

Maybe they pay their employees in RSUs and so need to keep some amount in reserve?

ASML is headquartered in the Netherlands, they don't do that over there - everyone is on a salary.

The annual report states that they don't grant stock options since 2017 and there is no word about stock based compensation in the balance sheet.

Building their machines takes a long time -- like a couple of years. It's also very labor intensive. And space constrained. Once the machine has been built and tested in Eindhoven, it has to be completely disassembled and shipped to the customer, then effectively completely rebuilt from the ground up. And there's a lengthy burn-in process where they have to tweak it for the specific local conditions -- which can vary if the machine has to be moved even just a foot to the left. Or if a truck drives by on a road a few miles away.

So, it's really hard to scale that process for building new machines.

They've got money burning in their pockets and no better place to spend it, so what do they do? Stock buybacks.

Disclaimer: I did a six month contract working for them several years ago, when they were towards the start of developing their EUV process. It was a real eye opener to have the tour of the facility and have everything explained to me.

> Once the machine has been built and tested in Eindhoven

Veldhoven :)

Silicon Veldhoven :^)

That's maybe exactly why they should spend some money on more production facilities.

We were in a massive boom before, it is probably in their best interest to not try and increase their production facilities at a too fast pace. Building out facilities that are, after the boom, underutilized is not wise is a capital heavy industry such as this one.

Sure, but the parent I commented on said "Building their machines takes a long time" as a reason for not building it out. Which I think is a bad reason.

I agree with you that the need maybe will not be there exactly when they have built out.

Also note that TSMC, Intel and a whole bunch of others are currently starting to build, or plan to build, new fabs (partly due to the new Chip Act). And they will need stuff from ASML.

Here you see how they ship systems:

https://www.youtube.com/watch?v=TL9Q435KU_Y

I don't think they are "completely disassembled" before shipping.

I don't think that tells you anything about what's in the box; the shipping container is a custom clean room env designed to maximize use of space in a cargo plane.

Harddrives typically come in a vacuum sealed bag, so I wager they could apply the same technique here if the components were small enough.

My point is that the size of the container tells something about the size of the components. "Completely disassembled" would mean every nut and bolt would be taken apart, which I don't think is the case given the size of the container.

Hard drives are not shipped anywhere near a clean room env. The inside of that box is probably one of the cleanest places on earth. It even blows other clean rooms like space craft manufacturing facilities out of the water.

And you're missing the fact that the outside of the box isn't a clean room, and it has to mate with the clean room at the customer facilities. A bajillion baggies of parts is a non starter if the outside of those baggies isn't a clean room env.

They did expand their production capacity significantly.

Have you looked at the way the ceo and other execs are compensated? I assume it is based on stock performance and there is your answer.

>Peter Wennink made €4,820,000 in total compensation as Co-President, Chief Executive Officer and Chairman of the Board of Management at ASML Holding in 2021. €1,020,000 was received as Total Cash, €3,537,000 was received as Equity and €263,000 was received as Pension and other forms of compensation.

The term for this is a positive feedback loop.

>Positive feedback in amplifier If the feedback signal is in the phase with the input signal, the effective input to the circuit is increased and this type of feedback is called positive, regenerative or direct feedback. It provides increased gain but it also increases distortion and leads to poor stability of gain.