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Semiconductor firms Samsung and Intel are reaping the fruits of their investment in Dutch chip equipment supplier ASML. Their investment values have reportedly grown 17-fold over the past few months, buoyed by a sooner-than-expected chip industry recovery. TSMC also brought ASML shares alongside Samsung and Intel back in 2012, but the Taiwanese firm sold off its entire stake in the company in 2015.
Samsung and Intel held onto their ASML investment
ASML (originally standing for Advanced Semiconductor Materials Lithography) is one of the biggest names in the semiconductor industry. It doesn’t make chips but supplies the equipment required for manufacturing chips. Based in Veldhoven, Netherlands, the company is one of the best and biggest in the business. In fact, it is the world’s only supplier of extreme ultraviolet lithography (EUV) machines used to manufacture the most advanced chips.
However, ASML hasn’t always been at the top of its game. Just over a decade back, it required investment from its customers to keep its business operations and R&D projects going. Samsung, Intel, and TSMC offered help. They bought a three percent, fifteen percent, and five percent stake in ASML, respectively, between August and September 2012. This equity sale provided the Dutch company with enough funds to run its business.
In January 2015, TSMC announced that it is selling all of its ASML shares. Samsung followed by selling a 1.4 percent stake in the company in September 2016, keeping the remaining 1.6 percent stake. Intel also cut its stake in ASML to 4.9 percent in late 2017, followed by another cut in 2018 to reduce its stake to under three percent. There haven’t been any reports of further share cuts from Samsung and Intel.
It proved to be a great move from the two semiconductor companies. ASML’s monopoly over EUV machines means it’s now one of the hottest prospects of the industry as we move towards sub-3nm chips. Despite an economic slowdown, ASML’s share prices on the New York-based stock exchange have risen 15.9% to $724.65 over the past three months (via). The company’s shares hit a one-year high of $735.93 on May 26.
With stocks flying high, ASML investors are reaping great profits. Early investors like Samsung and Intel are getting a 17-fold return on their investment at current prices. Samsung’s investment value in the Dutch firm has risen to $4.56 billion. Of course, these are unrealized gains unless the companies sell off their stock, which they are unlikely to. But it shows the value ASML has in the semiconductor market today.