ASML Q4 2022 financial
gallerdude 11 days ago [-]
Everyone talks about the machine that makes the chips, but I’ve never heard mentioned the machine that makes the machine that makes the chips.

(I guess it’s probably just a bunch of regular machines, but it feels like there’s got to be some special sauce in there somewhere)

nwiswell 11 days ago [-]
Mostly these machines are assembled from a combination of proprietary parts manufactured using regular machine tools by contract manufacturers, and from sub-units purchased from specialist suppliers.

For example: proprietary parts including optics, wafer chucks, process chambers, structural panels, etc are manufactured to spec by contractors. Pumps, valves, motion control boxes, wafer robots, loadports, servers, etc are all bought from suppliers.

There's not really any magic. The materials used for the parts are sometimes exotic (e.g. single crystal silicon, single crystal quartz, yttria coating, PEEK, sapphire, etc), but the contract manufacturers use the same old boring machine tools that everyone does.

cactusplant7374 11 days ago [-]
> There's not really any magic.

I've read that it would take China at least 10 years to get to ASML's current level. It might not be magic but there must be a lot of unknowns when starting from scratch.

nwiswell 11 days ago [-]
Yes, the design of those proprietary parts is very technical, but the manufacturing not so much. That's part of what makes the IP situation so tenuous and is a big part of why the FBI has aggressively prosecuted individuals for corporate espionage against WFE firms in the past.
cactusplant7374 11 days ago [-]
The tolerances are very tight. Manufacturing must be difficult.
bradknowles 11 days ago [-]
I worked a six month contract at ASML years ago. One of the most fascinating things was touring around the spaces with an experienced team leader, who explained a lot of their processes. Note that the below comes from my experience there prior to 2006. Nothing that I'm going to explain here is company proprietary information. Even if I had that, I wouldn't expose it.

Each top machine costs hundreds of millions of dollars to build. They are built by a dedicated team of people who only work on that one machine, and they take it from soup to nuts, including the installation in the field. They spend months taking measurements at the site before they ever start building the machine in the first place. Their placement of the machine and the measurements is very precise -- if the machine has to be moved by a centimeter in any direction from the original measurements taken, they have to basically start over from scratch.

The machine is completely built in clean room facilities at the HQ in Eindhoven, taken all the way to the point where it is used to do good size batches of test runs of known chip designs. Those clean rooms operate way beyond the cleanliness levels of a normal chip lithography clean room. They are some of the cleanest clean rooms in the world.

Once completed, the machine gets completely disassembled and shipped to the customer, along with the team who built it. Then they rebuild it on site. Once rebuilt, it will take months of running in and tweaking before it's able to be considered fully operational. That process alone can take over a year, if the team runs into more problems than typical.

The machines are so sensitive that a truck driving down the road ten miles away can affect the output and may cause the machine to be knocked out of calibration.

From the time of placing the order to the time when the machine is considered fully operational, multiple years have passed.

And that was way back before 2006, when my wife and I moved back here to the US. I had seen the door behind which all EUV design was done, but I never got a chance to see inside. It was locked up like Cheyenne Mountain. And yes, I did previously have a TOP SECRET/SCI clearance, and I've been briefed on exactly what the ANMCC and Cheyenne Mountain look like.

I have no idea how much more complex and sensitive the processes used by ASML have gotten since. I do believe the top machines now cost over a billion dollars, each.

nwiswell 10 days ago [-]
> I do believe the top machines now cost over a billion dollars, each.

This isn't accurate, the top end is no more than $200M (and large customers will negotiate down from there).

> The machines are so sensitive that a truck driving down the road ten miles away can affect the output and may cause the machine to be knocked out of calibration.

This is obviously untrue, fabs are busy industrial centers.

The assembly-partial disassembly-reassembly process you laid out is accurate, however, and is the case for all major wafer fabrication equipment.

seper8 9 days ago [-]
Wrong again intel-orders-asml-machine-still-drawing-board-chipmakers-look-an-edge-2022-01-19/

nwiswell 9 days ago [-]
That is a development system. The purchase prices of the actual manufacturing systems are never disclosed, since the negotiated price differs between customers.

In any event the HVM systems will cost significantly less. This similar article says $150M, as I claimed, and again the actual customer price would be less:

> ASML's most advanced machines in current commercial production, known as EUV lithography systems because of the "Extreme Ultraviolet" light waves they use to map out the circuitry of computer chips, are as big as a bus and cost around $150 million each.

seper8 8 days ago [-]
How are you so confidently wrong so often?

Wonder if you have ever heard of ASML before reading this news article. Just stop it.

nwiswell 8 days ago [-]
Has it occurred to you that I might work in this industry?

The other guy had a six month stint in manufacturing two decades ago.

nwiswell 11 days ago [-]
Not really any harder than making an airplane.

For older generations of tools, there are a lot of bootleg replacement parts floating around on secondary markets. When tools reach their end of life at leading-edge fabs, or when those fabs are shuttered, the tools are often sold off to trailing edge fabs in permissive jurisdictions with shoestring budgets.

These fabs are not averse to buying whatever works cheapest, and the OEM WFE companies don't really have any way to enforce IP.

seper8 11 days ago [-]
>Not really any harder than making an airplane. Except the airplane still works if something is misaligned by 10NM...
nwiswell 10 days ago [-]
That's adjusted dynamically during operation by interferometer controls, not in manufacturing. You'd get more than 10nm of misalignment just due to a couple degrees of temperature change.
seper8 9 days ago [-]
And that dynamical adjustment is very easy too ofcourse! Just move it x nm in the right direction!
nwiswell 9 days ago [-]
In fact it is quite easy! This is a solved problem, the stage is moved those minute distances using piezoelectric actuators.

Moving hundreds of microns accurately is actually a harder problem, since that requires traditional lead-screw style stages.

The two strategies are used together to create a stage that can move macroscopic distances quickly (e.g., die to die), but also make minute adjustments quickly to ensure alignment is maintained.

But, again, this has nothing to do with manufacturing

seper8 8 days ago [-]
Again, you have to manufacture and assemble all the components for the machine to work.

The reason only one company in the world can do it is not because it is easy. If it where easy other companies would be able to imitate it, but they cant. This is why ASML has a profit margin of 50%. This is why companies order these machines years in advance.

There are and have been many companies that have built airplanes. There is one company and one alone that can build these machines. I happen to work at said company and it is a long time ago that I have seen someone so confidently wrong on the internet.

nwiswell 8 days ago [-]
> Again, you have to manufacture and assemble all the components for the machine to work.

And, yet again: that is not the hard part.

The reason why ASML is the only company which sells EUV tools is because it is the only company which spent the tens of billions of dollars on developing the technology, not because it has magical manufacturing methods! There are many companies that build WFE tools. Nikon sells ArF excimer immersion litho tools, the manufacturing of which is similarly difficult. The thing that distinguishes EUV is the light source, the optical path, the non-transmissive optics, etc, and the difficulty of resolving all of the related technical challenges that introduces (pellicle heating, out of band flare, aberrations, Sn redeposition, resist outgassing, etc). Not the assembly.

If you work at ASML, you should know this. More specifically, you would not try to imply that the actual assembly requires 10nm precision. Are you an intern?

markus_zhang 11 days ago [-]
10 years is probably an underestimate given then current geopolitical condition.
rjzzleep 11 days ago [-]
Just last year people were commenting here on HN that China is years away from making anything under 14nm and that even that would be hard for them. Then we heard about China being years away from hypersonic missiles and how they couldn't even make fast memory chips.

Then we were surprised not only have been making 7nm chips for a year already, they also make the fastest memory chips. Our response? Let's sanction them so they can't sell those memory chips.

Instead of believing in the fairy tale that we can somehow block the country with the highest number of STEM graduates out of technology, maybe what we ought to be doing is to invest a little less in the bullshit professions and a bit more in the hard tech, not just here but also in places like Japan where they had the potential to compete with ASML but dropped out because it wasn't profitable enough more than a decade ago.

ksec 8 days ago [-]
>Just last year people were commenting here on HN that China is years away from making anything under 14nm and that even that would be hard for them.

Forget about the topic of China for a bit, 99.999% of HN comments on anything hardware are pretty much worthless. To the point I question how did software developers get so abstracted that they had little to zero basic understanding of hardware. When they should be considered in the same field.

If it is wasn't for the 0.00000001% of rare comments for those who actually work inside Intel, AMD, Lattice and ASML ( or some other SemiConductor Companies ) I would have skipped hardware topics on HN.

bradknowles 11 days ago [-]
Note that China was actually one of the biggest customers for ASML, going back to 2006 and earlier.

The difference is that China didn't get the latest and greatest machines. Taiwan did, but not China.

But ASML definitely had sales people in China that were willing to do whatever it took to make the sale. Including giving hundreds of gigabytes of free pirate DVD rips to their prospective customers. Guess how long that took over the 2Mbps E-1 lines that the local offices in China had to get back to the HQ offices in Eindhoven, where those could then get out onto the public Internet? Guess who helped run that central mail system that was frequently flooded by all these DVD rips that were being sent by the sales people to their customers?

tooltalk 10 days ago [-]
>> Note that China was actually one of the biggest customers for ASML, going back to 2006 and earlier.

Why would you make such an absurd comment about ASML's 2006 sales? or perhaps you mean to say 2016?

  Korea 1,085,497 13,730 662
  United States 931,971 740,036 24,262
  Taiwan 739,432 16,058 483
  Rest of Asia 470,915 937,107 1,282
  Europe 369,289 2,145,710 166,415
  Total 3,597,104 3,852,641 193,10

  Taiwan 2,140.3 2,815.9
  Korea 1,594.3 28.7
  United States 1,087.5 4,200.6
  China 758.2 2.6
  Singapore 245.6 0.8
  Japan 415.1 4.6
  Rest of Asia 26.7 2.8
  Netherlands 1.1 2,737.9
  EMEA 606.3 2.5
China's share in chips was a paltry low-single figure until few years ago -- less than 5% of global chip sales, according to SIA's report in 2022, and that also had a lot to do with foreign chip makers (eg, Samsung's Xi'an plant which opened in 2019 accounts for 40% of their entire DRAM production).
bradknowles 10 days ago [-]
I know where the sales reps were, and where the customers were that they were selling to. Maybe those sales were to companies that weren't technically Chinese, even though they were operating in China. And so maybe the sales got reported for some other region.

China was huge business back then before 2006. Kept our E-1 lines quite flooded with all those pirated DVD images that they were sending by e-mail. But we did fix that problem. And I did get a nice little invited talk out of the work I did on their e-mail system.

And yes, I said 2006 and I meant 2006.

markus_zhang 11 days ago [-]
If you properly sanction China it would be very difficult for them to make anything 28nm+. A lot of stuffs have to be imported from foreign countries so if US can convince JP/SK/EU to join the sanction it would be tough time for China.

Making hypersonic missiles or any military equipment is a different story as:

- You don't have to care about quality. You can make 100 chips, fail 90 and still have 10 to use, which is OK for military but would be a disaster for civilian;

- Worst case you can use espionage or diplomatic channels to find a small number of chips. You can't do that with mass market products.

kurthr 11 days ago [-]
I think you're comparing prototype low volume/yield production to 1000s of wafers per month at >90% yield. Those aren't comparable.

Intel could do 7nm (they called it 10) with DUV immersion equipment and double/quad patterning, but the yield was low 90s even for their highly tuned processes. That's why EUV is so important.

Don't believe all the "news" hype, it's just agit-prop entertainment.

pphysch 11 days ago [-]
Underestimate? Unless Washington aggressively nukes mainland China, recent overperformance by a post-Zero-COVID China suggests 10y is an overestimate.

Existential stress is an excellent motivator for rapid innovation. Or did we learn nothing from the 20th century?

yywwbbn 11 days ago [-]
> overperformance

What do you mean?

pphysch 11 days ago [-]
Growth, high tech innovation, etc.

China has been on the verge of collapse since 1991, according to Western popular consciousness.

yywwbbn 10 days ago [-]
There is no need for exaggeration. But.. Well clearly the last couple of years were not great for China compared to 10 or so prior to covid.
pphysch 10 days ago [-]
Based on which facts?
yywwbbn 4 days ago [-]
Slowing economic growth?

Extreme lockdowns?

Rapidly aging population in large part because of idiotic lunacy that was the one child policy?

tooltalk 11 days ago [-]
China doesn't really have any chip-making equipment supply-chain of their own; neither does Taiwan or South Korea. I think that 10 years to EUV timeline is a bit too ambitious considering that it required ASML about 20-30 years to develope and commercialize (with support of the industry, TSMC, Samsung, and Intel). Unless ASML is allowed to license their EUV to China and all 600+ suppliers who make high-precision lenses/machinaries, cutting-edge light-source, electrochemicals, etc, can export their supplies without any restriction, it's still a pipedream.
dirtyid 10 days ago [-]
10 years optimistic but PRC in position to create indigenous semi supply chain. After elevating semi to first-level dicipline in 2018, PRC is spitting out 30k IC graduates per year. They're still about 200k short, ~520k/720k out of what IC talent white paper estimates PRC needed for semi industry. I wadger that's comparable to total direct semi industry talent globally, which is really effort from a handful of countries (NL,US,JP,DE) in hardware industry that historically got 2nd pick on talent due to how well software pays. Would take less than 20-30 years to catchup especially if industrial policy mitigates commercialization concerns. It won't be easy but feasible especially if PRC indigenization starts taking domestic shares and take revenue/R&D stream western incubants who has to boost subsidy to plug loss.
tooltalk 4 days ago [-]
There is a lot of wishful thinking there.
hashtag-til 11 days ago [-]
Oh come on… you just broke the myth I had on my mind for many years, that this company was some magical craftwork shop for mechanical parts.

Anyway, nice to get a bit more realistic view. Thanks!

Eager to hear more about the software, which I heard some crazy stuff about how it is engineered and tested.

nwiswell 11 days ago [-]
Sorry :)

I should not really say too much, but the software tends to be kind of a trainwreck. WFE companies are definitely engineering-first organizations, but software is a second-order concern in general since it is a check-the-box requirement rather than a truly differentiating product feature, and companies like Lam and AMAT which are headquartered in the Valley have serious trouble competing for software talent. Moreover the software has a multi-decade pedigree with a concordant amount of technical debt. Pretty much everything is C++.

Anyway, there are fairly well-specified standards issued by SEMI like SECS-II and GEM that govern interoperability. In my (highly biased) opinion, the really interesting stuff is the real-time control systems that operate on millisecond timescales to make minute adjustments on the fly using data from onboard sensors to improve process outcomes.

phkahler 11 days ago [-]
I commented last week about floating point issues in a simple low pass filter. Someone responded confirming similar issues working on nanometer resolution servos. I just figure he's from ASML or similar. It seems someone from everywhere is here on HN.
markus_zhang 11 days ago [-]
Ah, multiple decade C++ codebase! My dream. Do they hire juniors in Canada?
mgfist 11 days ago [-]
The magic must be in the orchestration then, I'd suppose. Otherwise China wouldn't be struggling so much.
nwiswell 11 days ago [-]
Partly orchestration, but mostly in the design of those proprietary parts. There's decades of institutional knowledge and engineering iterations involved here. IP is a huge concern because if a Chinese competitor got their hands on the engineering drawings, there would not be a whole lot to stop them from producing copies.

Patents are viewed somewhat skeptically, since if they are not actually enforceable against a likely offender, they simply serve as a disclosure mechanism.

Fordec 11 days ago [-]
The main company there is Zeiss in Germany that makes all the high grade optics. Part of the reason ASML is Dutch is it has access to the German precision manufacturing up-stream, quite literally.
karmasimida 11 days ago [-]
ASML’s laser equipment is made mainly in US by Cymer
pa7x1 10 days ago [-]
The lasers are made by Trumpf in Germany.
ragebol 11 days ago [-]
Zeiss makes parts of the ASML machines. GP comment asks what machine make the ASML/Zeiss machines.

CNC machines I guess for everything besides the optics? Just a guess. And measuring equipment.

wordoneone 11 days ago [-]
NicoJuicy 11 days ago [-]
The only 2 companies that i know are invaluable for this is ASML and IMEC ( Belgium)
discodave 11 days ago [-]
There was an Odd Lots episode where they went deep on how complicated the ASML supply chain is.

I think it was this one (though there might have been another one):

11 days ago [-]
kube-system 11 days ago [-]
At some point upstream it’s all ore and petroleum.
docandrew 11 days ago [-]
“If it can’t be grown, it’s gotta be mined.”
drexlspivey 11 days ago [-]
If you keep going up it’s all hydrogen
renewiltord 11 days ago [-]
Man, the crypto + AI booms have been really good for the semiconductor industry. Everyone there is doing gangbusters: NVDA, AMD, ASML, AMAT, TSMC. The margins for these "shovel makers" are quite incredible. Good stuff. The way that's worked out for all of us is just amazing. It reminds me of when I was a kid and I'd wait for the new Intel processor to come out, excited just to read about it and dream of it.

It's curious that Intel has come out of this hardware boom completely mid.

sct202 11 days ago [-]
I suppose all the chip acts haven't really kicked in yet, so it'll be interesting to see how the regional deliveries shift. In their Presentation Investor Relations file for 2022, they have Taiwan as their #1 destination by dollar spend.

Taiwan 42%

South Korea 29%

China 14%

USA 7%

Japan 4%

Europe, Middle East, Africa (EMEA) 2%

Rest of Asia 2%

foota 11 days ago [-]
I wasn't aware that South Korea was such a big player in the chip industry. Is this for compute or something else?
eric-hu 11 days ago [-]
Samsung was a bigger foundry than TSMC until the 2010’s when Apple provided TSMC with billions in interest free loans in exchange for getting first dibs on new fab processes.
tooltalk 11 days ago [-]
Samsung's custom foundry started sometime in 2000's with Apple as their anchor client. TSMC really singlehandledly created the custom foundry industry in the late 1980's and is the largest by far. TSMC has always been the market leader -- though it had local competitors like UMC in Taiwan -- and Samsung the late comer. Samsung managed to come out with the first 14nm ahead of TSMC's 16nm in 2012 and made all Apple's A SOCs in Austin, TX, but Apple went ahead and outsourced everything to TSMC in Taiwan in their China/Taiwan-first strategy anyway; this is in spite of TSMC's higher cost and marginal performance difference.
eric-hu 10 days ago [-]
> this is in spite of TSMC's higher cost and marginal performance difference

Do you have references for this? Specifically the marginal performance difference. My understanding is that Apple had bigger fab contacts with Samsung than TSMC but were dissatisfied with Samsung’s roadmap execution. That was supposedly the motivation for them to finance TSMC’s new fabs at low interest. I could be wrong, I’m going off memory of various comments I’ve read on this forum over the years.

deepnotderp 11 days ago [-]
Samsung and SK Hynix are both big consumers of lithography machines
tooltalk 11 days ago [-]
South Korea is the largest memory chip maker in the world -- between Samsung and Hynix they have 75% of the market share. Micron has about 20%. Samsung also makes logic chips for internal use and external customers -- their foundry business is #2 in the industry. You alo have to remember that TSMC's meteotic rise on the other hand is fairly recent. Intel and Samsung were the largest producer/money-maker in the chip business until very lately.
florakel 11 days ago [-]
11 days ago [-]
KptMarchewa 11 days ago [-]
For example, Samsung and Hynix are Korean companies that together have 75% of global RAM market.
kryptiskt 11 days ago [-]
I wonder where the machines for TSMC's Arizona fabs would end up in that breakdown.
sct202 11 days ago [-]
The header to the graph says "Ship to Location" so probably under the US, unless they ship older units from Taiwan to the US and send new units to Taiwan. Intel reportedly sent at least one EUV machine from their development site in Oregon to a production fab in Ireland, so it's possible they could do the same.
nwiswell 11 days ago [-]
Related: Lam Research (another very large WFE company, #4 by revenue after AMAT, ASML, and TEL) announced a 7% layoff today.
morpheos137 11 days ago [-]
Doesn't the fact all major photolithography equipment manufacturers are outside Taiwan undermine the media narrative about the strategic importance of TSMC?
nickff 11 days ago [-]
Not really; TSMC is a critical part of the production process, and has a great many trade secrets and internal tools that make it indispensable. These machines are not ‘plug-and-play’.
bruce343434 11 days ago [-]
Ok, and?

No but on a serious note, can someone give some context? Is there something special about these numbers that is newsworthy?

hardware2win 11 days ago [-]
It comes from ASML

They and TSMC are one of the hottest companies that additionally do hard engineering instead of social medias or ads

somethoughts 11 days ago [-]
AMAT (Applied Materials) would be company representing the US in this space.

AMAT and ASML sell mostly complimentary semiconductor equipment to TSMC/Intel/Samsung (semiconductor manufacturers/fabs)

ShuffleBoard 11 days ago [-]
Neither AMAT nor ASML sell complimentary equipment. They sell vituperative, emotionally eviscerating, angry-at-the-world equipment.

Now I think their product lines complement each other nicely on a fab floor.

iruoy 11 days ago [-]
I wouldn't call ASML's products complimentary. They are the only machines capable of EUV lithography. Without EUV, nodes smaller than 7nm wouldn't be possible. But even before EUV they were the leading manufacturer of lithography machines. They deliver to all the big players like TSMC, Samsung and Intel.

They are so important/valuable that the US government is negotiating with the Dutch government to ban ASML from selling EUV machines to China.

nwiswell 11 days ago [-]
They're complimentary products because lithography isn't useful if you don't have Etch, CVD, PVD, ALD, CMP, Implant, etc.
cma 11 days ago [-]
They were already able to ban, because ASML's EUV effort partly came out of a DARPA/US-industry consortium (EUV LLC from the 1990s).
terafo 11 days ago [-]
They are negotiating DUV ban. EUV is banned for years now.
m00dy 11 days ago [-]
I remember bridgewater shorted ASML for big positions for no reason and then the news broke out that US government banned ASML from selling some stuff to China.
mitthrowaway2 11 days ago [-]
> They and TSMC are one of the hottest companies that additionally do hard engineering instead of social medias or ads

I really like the way you put this. Finally, a company actually worthy of being called a "technology company"!

comboy 11 days ago [-]
They may be the most important/irreplaceable company in the world.
kryptiskt 11 days ago [-]
ASML has a monopoly on Extreme UV lithography machines which are needed for top end chips. So it's a pretty good picture of where investment in chip fabrication is heading.
bdcp 11 days ago [-]
ASML has many eyes balls on it, due to the potential in stock prices
capableweb 11 days ago [-]
Rather, ASML makes some equipment that you literally cannot get from anywhere else, and the stock price is reflecting this.
fredski42 11 days ago [-]
Including the eye balls of Biden