Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>There’s been an avalanche of biased or disingenuous comments along the lines of “Samsung, TSMC won’t use High N.A. EUV” or “too expensive, too difficult”. </li>
<li>Samsung will use High NA in 4F² DRAM by 2028; TSMC in some but not all A14 processes by 2028. </li>
<li>We should really think about High NA as optionality value for ASML (share price), rather than a catalyst.</li>
</ul>


There’s been an avalanche of biased or disingenuous comments along the lines of “Samsung, TSMC won’t use High N.A. EUV” or “too expensive, too difficult”. 
Samsung will use High NA in 4F² DRAM by 2028; TSMC in some but not all A14 processes by 2028. 
We should really think about High NA as optionality value for ASML (share price), rather than a catalyst.


No More High N.A. EUV (ASML Next Gen)? Not Accurate. High N.A. Will Come, but Slowly: 2028-29

<ul>
<li>More US restrictions on export of SPE Semi Production Equipment to Chinese firms (CXMT, SMIC, YMTC). The big increase in Chinese spending was done over 2023-24, it's declining in 2025-26. </li>
<li>Chinese domestic SPE vendors are growing fast and gaining share from AMAT, LAM, TEL. ASML is a monopoly below 65nm. KLA is very dominant. Focus on best 2: ASML, KLA.</li>
<li>China’s efforts to grow its own supply chain and equipment makers will continue, AMEC and Naura are the leaders. Consolidation could start. </li>
</ul>


More US restrictions on export of SPE Semi Production Equipment to Chinese firms (CXMT, SMIC, YMTC). The big increase in Chinese spending was done over 2023-24, it's declining in 2025-26. 
Chinese domestic SPE vendors are growing fast and gaining share from AMAT, LAM, TEL. ASML is a monopoly below 65nm. KLA is very dominant. Focus on best 2: ASML, KLA.
China’s efforts to grow its own supply chain and equipment makers will continue, AMEC and Naura are the leaders. Consolidation could start. 


China – US: More US Restrictions on Chinese Firms, but Chinese Equipment Firms Are Growing Fast

<ul>
<li>AMAT mentions “tremendous architecture inflections” in Logic and Memory (GAA, BSPD, HBM), this is true. But reviewed yesterday, how much, how fast versus declining Mature Logic and China declining?</li>
<li>2025 China to decline -25%, RoW to increase +25% on AI. This should continue in 2026. Post China’s elevated capex in 2023-24, the SPE sector is a play on AI. </li>
<li>ASML and KLA are 1) quasi monopoly 2) in segments that outgrow the total market. ASML is cheapish, KAL at average valuations. Best 2 stocks: ASML, KLA</li>
</ul>


AMAT mentions “tremendous architecture inflections” in Logic and Memory (GAA, BSPD, HBM), this is true. But reviewed yesterday, how much, how fast versus declining Mature Logic and China declining?
2025 China to decline -25%, RoW to increase +25% on AI. This should continue in 2026. Post China’s elevated capex in 2023-24, the SPE sector is a play on AI. 
ASML and KLA are 1) quasi monopoly 2) in segments that outgrow the total market. ASML is cheapish, KAL at average valuations. Best 2 stocks: ASML, KLA


SPE Part 2: Growth in 2025-26 from AI Segment Only (Logic, HBM, Packaging). Best 2 Stocks: ASML, KLA

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>ASML Holding NV reported its first-quarter 2025 results, reflecting strong financial performance but also heightened market uncertainty driven by newly announced tariffs.</li><li>The company's total net sales reached €7.74 billion, slightly below analysts' expectations of €7.77 billion, although up from €5.29 billion a year earlier.</li><li>Net system sales contributed €5.7 billion, with €3.2 billion from Extreme Ultraviolet (EUV) systems and €2.5 billion from non-EUV systems, while Installed Base Management sales totaled €2 billion.</li></ul>

ASML Holding NV reported its first-quarter 2025 results, reflecting strong financial performance but also heightened market uncertainty driven by newly announced tariffs.The company's total net sales reached €7.74 billion, slightly below analysts' expectations of €7.77 billion, although up from €5.29 billion a year earlier.Net system sales contributed €5.7 billion, with €3.2 billion from Extreme Ultraviolet (EUV) systems and €2.5 billion from non-EUV systems, while Installed Base Management sales totaled €2 billion.

ASML Dominates China’s Semiconductor Surge But What Lies Ahead?

<ul>
<li>Small beat in 1Q25, small miss in 2Q (guidance vs Consensus). 2025 outlook unchanged but higher uncertainty, possibly weaker margins in 2H. Consensus on the middle of the guidance range.</li>
<li>Management comments on the benefits of High NA EUV, trying to counter the concerns on higher cost. Mngt says there are other benefits (cycle time, process simplification meaning higher yield)</li>
<li>The stock is trading at -1 stdev below average PEx, or 25x forward EPS. Problem is Avg PEx includes 2 valuations bubble. Excluding these, the stock is at average PEx.</li>
</ul>


Small beat in 1Q25, small miss in 2Q (guidance vs Consensus). 2025 outlook unchanged but higher uncertainty, possibly weaker margins in 2H. Consensus on the middle of the guidance range.
Management comments on the benefits of High NA EUV, trying to counter the concerns on higher cost. Mngt says there are other benefits (cycle time, process simplification meaning higher yield)
The stock is trading at -1 stdev below average PEx, or 25x forward EPS. Problem is Avg PEx includes 2 valuations bubble. Excluding these, the stock is at average PEx.


ASML: Overall on Track to Achieve 2025 Guidance. The Stock Has Corrected but Isn’t that Cheap

Netherlands

ASML Holding N.V. develops, produces, and markets semiconductor manufacturing equipment, specifically machines for the production of chips through lithography. The Company services clients world wide.

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ASML Holding NV (ASML NA)

No More High N.A. EUV (ASML Next Gen)? Not Accurate. High N.A. Will Come, but Slowly: 2028-29

Comments about Samsung and TSMC not using High NA EUV are misleading; both companies plan to implement it by 2028. High NA should be seen as...

Nicolas Baratte

China – US: More US Restrictions on Chinese Firms, but Chinese Equipment Firms Are Growing Fast

US to restrict export of Semi Production Equipment to Chinese firms CXMT, SMIC, YMTC. Chinese vendors gaining share from AMAT, LAM, TEL. China...

Nicolas Baratte

SPE Part 2: Growth in 2025-26 from AI Segment Only (Logic, HBM, Packaging). Best 2 Stocks: ASML, KLA

architectural advancements in Logic and Memory, but questions remain on growth rates and China's decline. ASML and KLA are top picks in the sector....

Nicolas Baratte

ASML Dominates China’s Semiconductor Surge But What Lies Ahead?

ASML Holding NV reported its first-quarter 2025 results, reflecting strong financial performance but also heightened market uncertainty driven by...

Baptista Research

ASML: Overall on Track to Achieve 2025 Guidance. The Stock Has Corrected but Isn’t that Cheap

ASML inline results in Q1 and Q2 guidance with potential weaker margins in 2H. Management touts benefits of High NA EUV despite concerns on cost....

Nicolas Baratte

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52-week Range

Market Cap (USDm)

P/E

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No More High N.A. EUV (ASML Next Gen)? Not Accurate. High N.A. Will Come, but Slowly: 2028-29

Comments about Samsung and TSMC not using High NA EUV are misleading; both companies plan to implement it by 2028. High NA should be seen as...

Nicolas Baratte

China – US: More US Restrictions on Chinese Firms, but Chinese Equipment Firms Are Growing Fast

​US to restrict export of Semi Production Equipment to Chinese firms CXMT, SMIC, YMTC. Chinese vendors gaining share from AMAT, LAM, TEL. China...

Nicolas Baratte

SPE Part 2: Growth in 2025-26 from AI Segment Only (Logic, HBM, Packaging). Best 2 Stocks: ASML, KLA

architectural advancements in Logic and Memory, but questions remain on growth rates and China's decline. ASML and KLA are top picks in the sector....

Nicolas Baratte

ASML Dominates China’s Semiconductor Surge But What Lies Ahead?

ASML Holding NV reported its first-quarter 2025 results, reflecting strong financial performance but also heightened market uncertainty driven by...

Baptista Research

ASML: Overall on Track to Achieve 2025 Guidance. The Stock Has Corrected but Isn’t that Cheap

​ASML inline results in Q1 and Q2 guidance with potential weaker margins in 2H. Management touts benefits of High NA EUV despite concerns on cost....

Nicolas Baratte

US to restrict export of Semi Production Equipment to Chinese firms CXMT, SMIC, YMTC. Chinese vendors gaining share from AMAT, LAM, TEL. China...

ASML inline results in Q1 and Q2 guidance with potential weaker margins in 2H. Management touts benefits of High NA EUV despite concerns on cost....