ASML Faces Stock Drop as Canon Challenges Semiconductor Market Dominance

The Dutch semiconductor equipment company ASML, recently faced a drop of about 1.5% in pre-market trading. Canon unveiled advanced machines capable of producing cutting-edge semiconductors, positioning them as simpler alternatives to ASML’s extreme lithography machines.

Canon’s FPA-1200NZ2C machines boast the ability to produce semiconductors using a 5-nanometer process, with potential for even smaller fabrication down to 2 nanometers. In comparison, Apple’s powerful A17 Pro chip found in their iPhone 15 Pro operates on a nanometer process. Notably, ASML’s EUV machines, vital for lithography, are large in size and come with hefty price tag of approximately$200 million.

While Canon did not disclose the exact price of its FPA-1200Nz2C machine, reports suggest that it is targeting semiconductor foundries such as Taiwan Semiconductor (TSM).  This is expected to dent ASML’s revenues since TSM already purchases EUV lithography tools form ASML. Hence, this is a clear indication that Canon is looking to disrupt ASML’s market share.

TF International Securities analyst Ming-Chi Kuo recently predicted a reduction in the ASML’s shipments.

Canon’s move into the semiconductor market is a clear challenge for ASML, which has been the leader in the semiconductor equipment industry for some years. However, Canon’s nanoimprint semiconductor manufacturing systems could revolutionize the production of semiconductors in terms of speed and efficiency. This could eventually lead to an uptick in Canon’s market share.

Canon’s entry into the semiconductor market is disrupting the status quo dominated by ASML in the equipment industry. The announcement of its FPA-1200NZ2C machine is a clear indication that Canon understands the market and the need for faster and more efficient equipment. Given that ASML’s EUV machines are larger and more expensive, the new machine from Canon could potentially provide a more cost-effective solution for businesses that require sophisticated semiconductor equipment. As more businesses shift towards smaller and more efficient semiconductor technology, Canon’s move into the market may be the start of a significant shift in the semiconductor industry.