Monopolies are like Christmas cake: they can last a surprisingly long time, but must eventually expire. The English East India Company’s stranglehold on trade routes lasted centuries. In the US, Standard Oil managed a couple of decades before the Supreme Court called time in 1911. Where on that spectrum should one put chipmaking machine manufacturer ASML?
Worries that China is producing its own version of ASML’s chip printing tools knocked 8 per cent off ASML’s shares last week. To be clear, the Dutch company’s monopoly isn’t at imminent risk. China is one technological generation behind when it comes to the “deep ultraviolet” machinery used to etch smaller circuits, according to a report in The Information.
Moreover, those DUV tools are in turn probably a decade behind ASML’s more advanced “extreme ultraviolet” machines. That’s a much wider gap than Chinese contenders must bridge in products like chips themselves or AI models. While China has shown aptitude for warp-speeding industrial processes, it took ASML 12 years to ship a prototype EUV kit and another eight to reach the productivity rates that attracted customers.