FilterHN

They run on the rate of change of chip production. To make up for the loss of China chip production in the US/Europe would have to increase the rate of change ie grow exponentially.

Going forward how bad of a move this is for one of Europe's leading tech companies will be apparent IMO. It's all about the moat. The sanctions started to fill in the moat when they catalysed a massive investment on lithography in China, but did wonders to preserve the moat of Nvidia, Intel, ARM, etc by setting their Chinese counterparts back a decade.

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bgnn

2 days ago

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EU chip production is negligible, the change rate is positive but again negligible (single 16nm fab). US has some spending but rely heavily on Intel. That says a lot. So, it's Taiwan and Korea. Though TSMC and Samsung are scaling up capacity, they won't do it to the scale as AI-bros want it. It's too big of a risk to have over-capacity in a downturn. This happened in the past several times and the industry learned to always stay couple of steps behind the hype. Similar to oil and gas industry.

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tonetegeatinst

2 days ago

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I agree that their is no lack of demand for chips. But the cost of building a brand new fan, or even upgrading one is massive.

Were talking a small market of countries or super massive corporations that could possibly afford to build a fab.

The revenue is that eventually hardware needs to be replaced, and existing fans have to either upgrade or scale horizontally if they want to keep up with market and demands.

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lencastre

2 days ago

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ASML has NL sized moat. They’ll be fine

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more_corn

1 day ago

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So a buying opportunity? If the global market is fine and business fundamentals are fine this might be one of the fabled “buy low” opportunities.

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ralfn