Source: Zhitong Finance "Since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%)." With the rebound of the stock market, the old adage "Sell in May and Go Away" seems to have been a bad advice once again. Last month, the S&P 500 index rose 4.8%, the best May performance since 2009. The NASDAQ 100 index rose nearly 6.2%, and the NASDAQ Composite Index rose 6.9%. Goldman Sachs FICC & Equities Trading Division said: "History doesn't really support this saying. Don't sell, leave the market (go on vacation), and enjoy the good times." The rising trend is still to be continued? If history is any guide, it may indicate that the rise of the stock market is not over yet. Looking ahead to the rest of 2024, Scott Rubner, Managing Director of the Goldman Sachs Global Markets Division and tactical expert, pointed out the following historical background for investors. Rubner stated that the S&P 500 index has risen 10.7% year-to-date, and since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%). "Since 1950, the median return of the last 7 months of each year (June 1 to December 31) is 5.4%. In the aforementioned 21 cases, the average performance of the last 7 months increased to 8.1%." Rubner added. Rubner also pointed out that the NASDAQ index has risen for 16 consecutive Julys, with an average return of about 4.64%.

The headquarters of the lithography giant is located in the Netherlands. $ASML Holding (ASML.US)$is about to deliver its latest top-notch chip manufacturing equipment to the world's largest chip manufacturer. $Taiwan Semiconductor (TSM.US)$and $Samsung Electronics Co., Ltd. (SSNLF.US)$According to the latest disclosure from an ASML spokesperson, Roger Dassen, CFO of ASML, said in a recent conference call to analysts that ASML's top three customers - Taiwan Semiconductor, Intel, and Samsung Electronics - which contribute huge revenue to ASML, will receive ASML's latest high-NA EUV lithography machines by the end of this year.

It is understood that Intel has ordered ASML's latest EUV lithography machine, and ASML has shipped the world's first high-NA EUV lithography machine to a large semiconductor manufacturing plant in Oregon, owned by Intel, at the end of December 2023.

It is currently unclear when TSMC, ASML's largest EUV lithography machine customer, will officially receive these devices. A representative of the world's top semiconductor manufacturer said the company is working closely with semiconductor equipment suppliers as planned and declined to comment further.

It is worth noting that in mid-May, Kevin Zhang, senior vice president of TSMC, said that the price of ASML's latest advanced lithography equipment is daunting. "This EUV lithography machine is very expensive." He was referring to ASML's latest "high-NA" level of EUV lithography machines.

"I like the performance of the high-NA EUV, but I really don't like its price. The use of new ASML technology will depend on where it is most economically viable and our ability to achieve technical balance." Kevin Zhang said at a technology conference in Amsterdam at the time. However, he declined to comment on when TSMC may begin ordering the new high-NA EUVs from ASML.

Under the stimulation of the news disclosed by ASML spokesmen, ASML's share price rose 3.5% to 903.70 euros in the Amsterdam Stock Exchange, rising about 33% in the Netherlands so far this year. In pre-market trading in the US, ASML's share price rose by more than 4%.

High-NA EUV is crucial for processes of 2 nanometers and below.

ASML's "high-NA" level EUV lithography machine system, which can imprint semiconductors with lines as thin as just 8 nanometers - 1.7 times smaller than the previous generation of EUV machines. In ASML's conception, this new EUV will be used to produce high-performance advanced process chips that provide powerful driving force for the most advanced consumer electronics products such as ChatGPT and AI smartphones.

However, this chipmaking machine, which is known as the "pinnacle of human technology," costs an astonishing €350 million (approximately $380 million) each and weighs as much as two Airbus A320s.

ASML, based in the Netherlands, is the world's largest manufacturer of lithography systems, and its lithography equipment plays the most important role in the process of manufacturing chips. ASML is the only supplier of advanced EUV lithography machines for TSMC, Samsung and Intel for manufacturing high-end process chips.

If the chip is the "pearl" of modern human industry, then the lithography equipment is the tool necessary to produce this "pearl," more importantly, ASML is the world's only supplier of EUV lithography equipment needed to manufacture the most advanced process chips such as 3nm, 5nm and 7nm chips, etc. Therefore, the demand of ASML's largest customers such as TSMC, Intel and Samsung, can be said to be the barometer of the health of the chip industry.

Intel's core goal of spending a lot of money to purchase this equipment is to strive to achieve the most advanced chip process route of 2nm and below - that is, the 18A, 14A and 10A that Intel planned. "18A" and other chip manufacturing categories refer to Intel's planned 1.8nm level chips and its 3D chiplet advanced packaging technology roadmaps.

For the development of 2nm and below node manufacturing technology by Intel and Taiwan Semiconductor, ASML's high-NA EUV lithography machine is crucial. Compared to ASML's standard EUV lithography machine, the main difference lies in the use of a larger numerical aperture. High-NA EUV technology uses a 0.55 NA lens, which can achieve 8nm resolution, while standard EUV technology uses a 0.33 NA lens.

Therefore, this new NA technology can print smaller feature sizes on chips, which is crucial for the development of manufacturing technologies for chips with 2nm and below. As for high-performance AI accelerators such as Nvidia's AI GPUs for AI training/inference, the 2nm and below process is crucial for improving AI system computing power. Currently, Nvidia's H100/H200 AI GPUs use Taiwan Semiconductor's 4nm process technology, while the newly launched Blackwell architecture AI GPU will use Taiwan Semiconductor's 3nm process technology.

Taiwan Semiconductor executives said that this new lithography machine is too expensive.

Taiwan Semiconductor previously expressed concern about the price of this new EUV. In May, Kevin Zhang, senior vice president of Taiwan Semiconductor, spoke directly in Amsterdam, saying that the price of high-NA EUV is too high. He also stated at the time that Taiwan Semiconductor's so-called A16 chip node technology (generally believed to be a 1.6nm chip process technology) will be launched by the end of 2026, and it may not be necessary to use ASML's newly launched high-NA EUV, and it can continue to rely on some of Taiwans old EUV lithography equipment. "I think on this point, our existing EUV capabilities should be able to support new processes," Kevin Zhang said.

Nevertheless, Taiwan Semiconductor has always been an active participant in ASML's high-NA EUV project. Analysts from Jefferies, including Janardan Menon, expect that Taiwan Semiconductor will use high-NA EUV on the A14 manufacturing node in 2028. The analysts at the institution said after a conference call with ASML CFO Dassen that ASML still believes that its total revenue scale may be in the upper part of the outlook range in 2025.

Jefferies analysts expect that ASML's average lithography machine order size may be around €5.7 billion in the remaining three quarters of this year. ASML management expects a revenue outlook range of €5.7 billion to €6.2 billion for the second quarter, and Jefferies analysts expect ASML's total revenue in 2025 to reach €40 billion.

Editor / ruby