Why are you specifying that particular lithography technique? Might China decide to leapfrog to emulating the newest technology, the EXE:5000, ASML’s high-numerical-aperture extreme-ultraviolet-lithography machine. Intel has one now, and presumably others. See details on it here: https://spectrum.ieee.org/high-na-euv and here: https://www.asml.com/en/products/euv-lithography-systems. According to ASML, its EXE:5000 makes significantly smaller chip features than ArFi DUV and is a significantly different technology.
It isn't clear to me whether the EXE:5000 might be significantly harder to replicate than AdFi DUV. Also, the technologies are so different that mastering ArFi DUV would not create much of a pathway to the superior technique. Another aspect is that the wavelength of the EXE:500 is almost as short as the x-ray portion of the spectrum, so close that transmission optics won't work, only reflection optics and only at low angles of incidence. So even the optical trains for these two technologies are drastically different.
If China has managed to lure away ASML employees who know how the EXE:5000 works, it might even have one at the testing stage by now.
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Why might you be wrong?
Much can happen in the 16 months until the forecast horizon. For example, if Trump is elected, his current crop of advisors doesn't seem to be technologically literate. He might simply allow China to buy a currently prohibited lithography machine which could then be reverse engineered. Alternatively, China might covertly get one through a intermediary.
I had the same question, yet it seems DUV will be a significant part of ASML's revenue stream for several more years, as their recent earnings call made clear:
So the attach rate, if you want to call it like that, of the deep UV business to the EUV business will be kind of similar. So the growth rate you will see on EUV, you will sort of see back also in the growth rate for the non-China part of the deep UV business.
Part of this may have to do with economics (EUV being more expensive and complex, may be suitable for only a percentage of chip production) as with patents (only recently has SMEE applied for some EUV patents, while DUV being older has more chinese IP) leading to fabs implementing hybrid approaches (DUV for some components) . My guess is that litography being only a part of a very complex manufacturing process, efforts to leapfrog to EUV or beyond EUV may be insufficient, as whoever the dominant competitor to ASML ends up being (most likely SMEE) they must offer DUV in their portafolio too.
You make a good point for the value of both. My concern is that the technologies including optics for the two are disjunct. Does China have the resources to pursue both simultaneously? If not, which might they prioritize? As for patents and intellectual property in general, China tends to disregard them.
I'm glad we're having this discussion, as this is a very complex topic! On Trump, I'm uncertain as to the effects of his antagonistic China policies, as part of the Biden extraterritorial controls on ASML were based on diplomatic understandings, which may falter under him.
As to what may China prioritize I find it helpful to think of "chinese actors" as a varied group, some, like Huawei and CMEE, very tied to CCCP strategies, others less so. From my research, these actors have been importing ASML DUV and upgrading it, so the need for a commercial full machine may be in doubt, or a less efficient path, yet the recent controls are clearly aimed at capping their supply in the face of a large potential market, so I am assuming the strategic need is there for both DUV and EUV. As to patents and more broadly, having an public commercial offering of a DUV machine as oppossed to a darker market I am unsure and would be interested in what others think.
Why do you think you're right?
Why are you specifying that particular lithography technique? Might China decide to leapfrog to emulating the newest technology, the EXE:5000, ASML’s high-numerical-aperture extreme-ultraviolet-lithography machine. Intel has one now, and presumably others. See details on it here: https://spectrum.ieee.org/high-na-euv and here: https://www.asml.com/en/products/euv-lithography-systems. According to ASML, its EXE:5000 makes significantly smaller chip features than ArFi DUV and is a significantly different technology.
It isn't clear to me whether the EXE:5000 might be significantly harder to replicate than AdFi DUV. Also, the technologies are so different that mastering ArFi DUV would not create much of a pathway to the superior technique. Another aspect is that the wavelength of the EXE:500 is almost as short as the x-ray portion of the spectrum, so close that transmission optics won't work, only reflection optics and only at low angles of incidence. So even the optical trains for these two technologies are drastically different.
If China has managed to lure away ASML employees who know how the EXE:5000 works, it might even have one at the testing stage by now.
Why might you be wrong?
Much can happen in the 16 months until the forecast horizon. For example, if Trump is elected, his current crop of advisors doesn't seem to be technologically literate. He might simply allow China to buy a currently prohibited lithography machine which could then be reverse engineered. Alternatively, China might covertly get one through a intermediary.
I had the same question, yet it seems DUV will be a significant part of ASML's revenue stream for several more years, as their recent earnings call made clear:
https://www.fabricatedknowledge.com/p/earnings-tsmc-asml-aehr-telecom
Part of this may have to do with economics (EUV being more expensive and complex, may be suitable for only a percentage of chip production) as with patents (only recently has SMEE applied for some EUV patents, while DUV being older has more chinese IP) leading to fabs implementing hybrid approaches (DUV for some components) . My guess is that litography being only a part of a very complex manufacturing process, efforts to leapfrog to EUV or beyond EUV may be insufficient, as whoever the dominant competitor to ASML ends up being (most likely SMEE) they must offer DUV in their portafolio too.
I'm glad we're having this discussion, as this is a very complex topic! On Trump, I'm uncertain as to the effects of his antagonistic China policies, as part of the Biden extraterritorial controls on ASML were based on diplomatic understandings, which may falter under him.
As to what may China prioritize I find it helpful to think of "chinese actors" as a varied group, some, like Huawei and CMEE, very tied to CCCP strategies, others less so. From my research, these actors have been importing ASML DUV and upgrading it, so the need for a commercial full machine may be in doubt, or a less efficient path, yet the recent controls are clearly aimed at capping their supply in the face of a large potential market, so I am assuming the strategic need is there for both DUV and EUV. As to patents and more broadly, having an public commercial offering of a DUV machine as oppossed to a darker market I am unsure and would be interested in what others think.