The hype is all about humanoid robots, but the constant winners are in the background.

I have divided the analysis into two perspectives. 1. the complete value chain of humanoid robots, which shows all the players from the chip to the finished robot, and 2. the blade manufacturers in the background, who always earn money as enablers, regardless of which manufacturer wins the race.

ASML, Applied Materials and Tokyo Electron dominate in manufacturing technology. Quality assurance comes from Keysight, Advantest and Teradyne. Chip design is supported by Synopsys, Cadence and ARM. Data streams are secured by Arista Networks, Cisco and Equinix. The computing basis is created in the cloud by Amazon, Microsoft and Alphabet. Albemarle, Lynas and Umicore play a central role in raw materials and battery materials. These companies monetize their customers' investment waves, have high barriers to entry, service revenues and pricing power, but remain cyclical with risks from export rules, capex cuts and currency movements.

🌐 Value chain of humanoid robots Sector overview

1. research & chip design (IP / EDA)

$ARM (+0,09 %)
ARM Holdings (ARM, UK/USA) - CPU architectures

$SNPS (+0,77 %)
Synopsys (SNPS, USA) - Chip design software

$CDNS (-0,19 %)
Cadence Design Systems (CDNS, USA) - EDA & Simulation

2. manufacturing technology & equipment

$ASML (-0,55 %)
ASML (ASML, NL) - EUV lithography, key monopoly

$AMAT (-0,28 %)
Applied Materials (AMAT, USA) - Process equipment

$8035 (-1,82 %)
Tokyo Electron (8035.T, JP) - Wafer equipment

$KEYS (-0,01 %)
Keysight Technologies (KEYS, USA) - Test & RF measurement technology

$6857 (-1,37 %)
Advantest (6857.T, JP) - Semiconductor test systems

$TER (+0,36 %)
Teradyne (TER, USA) - Test systems + robotics (Universal Robots)

3. chip production (Foundries)

$TSM (-0,46 %)
TSMC (TSM, TW) - Largest contract manufacturer

$005930
Samsung Electronics (005930.KQ, KR) - Memory + Foundry

$GFS (-0,27 %)
GlobalFoundries (GFS, USA) - Specialized production

4. computing & control unit ("brain")

$NVDA (-1,44 %)
Nvidia (NVDA, USA) - GPUs, AI accelerators

$INTC (-0,45 %)
Intel (INTC, USA) - CPUs, FPGAs

$AMD (-1,27 %)
AMD (AMD, USA) - CPUs/GPUs

$MRVL (+0,22 %)
Marvell Technology (MRVL, USA) - Network/data center chips

5. sensors ("senses")

$6758 (+2,5 %)
Sony (6758.T, JP) - CMOS image sensors

$6861 (-0,66 %)
Keyence (6861.T, JP) - Vision systems, sensors

$STM (+0 %)
STMicroelectronics (STM, CH/FR) - MEMS sensors

6. actuators & power electronics ("muscles")

$IFX (-0,13 %)
Infineon (IFX, DE) - Power semiconductors, SiC

$ON (-0,05 %)
N Semiconductor (ON, USA) - SiC/Power Chips

$STM (+0 %)
STMicroelectronics (STM, CH/FR) - Motor control & power

$TXN (-0,14 %)
Texas Instruments (TXN, USA) - Motor control, power ICs

$ADI (-0,23 %)
Analog Devices (ADI, USA) - Energy & BMS chips

7. communication & networking ("nerves")

$QCOM (-0,02 %)
Qualcomm (QCOM, USA) - 5G/SoCs

$AVGO (-0,35 %)
Broadcom (AVGO, USA) - Network & radio chips

$SWKS (+0,05 %)
Skyworks Solutions (SWKS, USA) - RF components

8. energy supply

$300750
CATL (300750.SZ, CN) - Batteries

$6752 (+1,3 %)
Panasonic (6752.T, JP) - Batteries for automotive/robotics

$373220
LG Energy Solution (373220.KQ, KR) - Batteries

9. cloud & infrastructure

$AMZN (+0,04 %)
Amazon (AMZN, USA) - AWS

$MSFT (-0,05 %)
Microsoft (MSFT, USA) - Azure

$GOOG (+0,57 %)
Alphabet (GOOGL, USA) - Google Cloud

$EQIX (+0,64 %)
Equinix (EQIX, USA) - Data center operator

$ANET (+0,1 %)
Arista Networks (ANET, USA) - Network infrastructure

$CSCO (+0,13 %)
Cisco Systems (CSCO, USA) - Edge & Data Center Networks

10. software & data platforms

$PLTR (-0,71 %)
Palantir (PLTR, USA) - Data integration, decision software

$DDOG (+0,19 %)
Datadog (DDOG, USA) - Cloud monitoring / observability

$SNOW (-0,69 %)
Snowflake (SNOW, USA) - Cloud-native data platform

$ORCL (-0,34 %)
Oracle (ORCL, USA) - Databases, ERP

$SAP (-0,3 %)
SAP (SAP, DE) - ERP/cloud systems

$PATH (+0,35 %)
UiPath (PATH, USA) - Automation software (RPA)

$AI (+0,41 %)
C3.ai (AI, USA) - Enterprise AI platform

11. end applications / robots

$ABB
ABB (ABB, CH) - Industrial robots

$6954 (-0,77 %)
Fanuc (6954.T, JP) - Industrial robots, CNC

$TSLA (-0,23 %)
Tesla (TSLA, USA) - Optimus" humanoid robot

$9618 (-1,1 %)
JD.com (JD, CN) - E-commerce & automated logistics

🛠️ Shovel manufacturer for humanoid robots

🔹 Hardtech (physical "shovels")

These companies provide the material basis: manufacturing machines, raw materials, semiconductor base.

Semiconductor Equipment & Manufacturing

$ASML (-0,55 %)
ASML (ASML, NL) - EUV lithography (monopoly).

$AMAT (-0,28 %)
Applied Materials (AMAT, USA) - Wafer equipment.

$8035 (-1,82 %)
Tokyo Electron (8035.T, JP) - Process equipment.

Test systems (hardware-side)

$6857 (-1,37 %)
Advantest (6857.T, JP) - Semiconductor test.

$TER (+0,36 %)
Teradyne (TER, USA) - Test systems + industrial robots.

Materials & raw materials

$ALB (-1,23 %)
Albemarle (ALB, USA) - Lithium (batteries).

$LYC (-0,75 %)
Lynas Rare Earths (LYC.AX, AUS) - Rare earths for magnets.

$UMICY (-1,23 %)
Umicore (UMI.BR, BE) - Cathode materials, recycling.

🔹 Soft/infra (digital "shovels")

These companies supply the infrastructure & toolswithout which development, training and operation would be impossible.

Design Software & IP

$SNPS (+0,77 %)
Synopsys (SNPS, USA) - EDA software.

$CDNS (-0,19 %)
Cadence Design Systems (CDNS, USA) - Chip design & simulation.

$ARM (+0,09 %)
ARM Holdings (ARM, UK/USA) - CPU architectures (license model).

Test & Measurement (software/signal level)

$KEYS (-0,01 %)
Keysight Technologies (KEYS, USA) - Electronics & RF test systems.

Network & data center backbone

$ANET (+0,1 %)
Arista Networks (ANET, USA) - High-speed networks.

$CSCO (+0,13 %)
Cisco Systems (CSCO, USA) - Data center/edge networks.

$EQIX (+0,64 %)
Equinix (EQIX, USA) - Data centers (colocation).

Cloud infrastructure

$AMZN (+0,04 %)
Amazon (AMZN, USA) - AWS (cloud, AI training).

$MSFT (-0,05 %)
Microsoft (MSFT, USA) - Azure.

$GOOG (+0,57 %)
Alphabet (GOOGL, USA) - Google Cloud.

Takeaway: Investing in the infrastructure stack allows you to participate in the robotics trend regardless of the subsequent product winner and reduces the individual product risk, but you have to live with cycles. In your opinion, which stage of the chain offers the best risk/return combination and fits into a disciplined portfolio?

Source: Own analysis based on publicly available company information and IR materials of the companies mentioned.

$HEIA (-0,17 %)
$EL (+0,15 %)
$NUE (+0,23 %)
$CDNS (-0,19 %)
$WM (-0,26 %)
$MSFT (-0,05 %)
$V (-0,01 %)
$OR (-0,08 %)
$AZN (-0,16 %)
$MRK (+0,27 %)
$PG (-0,03 %)
$SBUX (-0,01 %)
$BCS (+0 %)
$META (-0,09 %)
$BABA (+1,67 %)
$QCOM (-0,02 %)
$AIR (-0,3 %)
$HSBC (+0 %)
$GSK (+0,6 %)
$MBG (+0,8 %)
$F (-0,17 %)
$AAPL (-0,05 %)
$AMZN (+0,04 %)
$MA (+0,1 %)
$7203 (+0,37 %)
$SHEL (-0,03 %)
$005930
$SNY (+0,46 %)
$CMCSA (+0,49 %)
$COIN (+0 %)
$NET (-0,33 %)
$XOM (-0,16 %)
$CVX (+0,1 %)
$CS (-0,77 %)
$NTDOY (+0 %)
$CL (+0,39 %)
$DTG (+0,35 %)
$UNH (+0,11 %)

I've been thinking for some time that it's about time I wrote an article about the company Tokyo Electron
$8035 (-1,82 %) and now the time has come!

Tokyo Electron is a Japanese company that operates in the field of semiconductor equipment equipment. The company is an essential part of the global semiconductor supply chain, Without it, there would be no semiconductorsespecially advanced ones, because that is where they dominate the market.

Here on Getquin, a lot is written every day about the Dutch ASML $ASML (-0,55 %) who have a monopoly in the field of EUV lithography. However, the EUV machine is unfortunately useless on its own, because each of ASML's highly complex EUV machines inevitably requires technology from Tokyo Electron. This concerns the coaters and developers.

With the coating an extremely thin layer of photoresist is applied to a wafer with nanometer precision, Only then are they usable for the EUV process. This is followed by developingin which specific exposed or unexposed areas on the wafer are removed in order to create a certain pattern. The whole process is incredibly complex and difficult to implement. The coater/developer and EUV machines form a kind of unit. Tokyo Electron has a market share of approx. 90% and even a monopoly in EUV lithography. monopoly. The barriers to entry are also considered to be very high. All in all, it can be said that there are no high-end chips without ASML's EUV lithography, but no EUV lithography without Tokyo Electron's coater/developer. Tokyo Electron benefits directly and inevitably from ASML's success.

But that's not all, Tokyo Electron is much broader. They also hold market shares between 20-30% in dry etch, thin film deposition (CVD/ALD) and wafer cleaning (stable - rising everywhere). Competitors in this area are in particular Applied Materials $AMAT (-0,28 %) and LAM Research $LRCX (+0,05 %) .

Also becoming increasingly relevant is advanced packaging. Here, several chips are connected together, so to speak (e.g. CPUs, GPUs...). It therefore represents a key market for AI and other trends. Tokyo Electron currently holds market shares of around 10-15% (tendency strongly increasing). They are particularly strong in the essential wafer bondingi.e. the bonding of several finished wafers, where the market share is already at 32% (tendency rising sharply). They are also expanding into other areas.

Overall, they benefit from their diversification and strong customer loyalty. They work very closely with foundry companies such as TSMC $2330 and Samsung $005930 whereby many processes are so closely coordinated that many innovations only emerge in production itself. Tokyo Electron also has an advantage over the competition, as their strong diversification (and market dominance in certain areas) means that they can offer complete solutions for their customers. In advanced packaging in particular, there are many smaller players that are only active in one niche (e.g. Süss MicroTec $SMHN (-0,34 %) ), which makes them less competitive with Tokyo Electron.

It should now be roughly clear what kind of company Tokyo Electron is and why its products are so important. so important are so important. Now let's look at some numbers:

Turnover (2025): €14.9 billion (+32.83%)

Profit (2025): €3.3 billion (+49.50%)

Market capitalization: € 75.2 billion

P/E RATIO: 23.69

P/E ratio 2030e: 13.40

Debt: 0¥

Cash position: approx. € 3 billion

Over the next few years (up to 2030), Tokyo Electron is planning investments of 1.5 trillion ¥ (approx. €10 billion)especially in the area of Advanced Packaging. They are therefore investing heavily in their technological leadership and expanding into new growth markets. Their successful execution is reflected in the fact that they steadily becoming more profitable
and gaining market share all round. In the year 2027 they want a profit margin of 35% which would put the competition in the shade.

I also think it's important to emphasize that Tokyo Electron has been incredibly successful in talent acquisition acquisition. They are a very popular employer and last year alone they received 25,000 applications received from a total of around 17.000 employees worldwide. As part of their investment strategy, they plan to hire 2,000 new employees each year (10,000 in total) (this represents an increase of almost 60% growth). The employees who already work at Tokyo Electron are also very happy there. In Japan, only 1% of employees who start at Tokyo Electron leave the company at some point. Internationally it is also only 2-3%. This not only shows the quality of the employer, but also ensures that the know-how is retained within the company.

Conclusion: Tokyo Electron is a highly profitable, technological leader and innovative supplier whose products are irreplaceable, especially for the most advanced chip production. With a modern corporate culture and an aggressive growth strategy in an exponentially growing market environment the company offers an attractive investment opportunity with a robust moat and long-term high upside potential.

The savings plan is running :)

The hydrogen industry is on the move! On March 11, 2025, Samsung E&A (formerly Samsung Engineering) $005930 caused a stir with a strategic investment in Nel ASA $NEL (+1,46 %) caused quite a stir. The South Korean company acquired 167,132,530 newly issued shares in the Norwegian hydrogen specialist at a price of NOK 2.1125 per share. This corresponds to a total volume of approximately NOK 353 million (USD 33 million). This means that Samsung E&A now holds 9.1% of the shares, making it Nel's largest single shareholder.

But this is not just a pure equity investment - there is a much bigger strategy behind it.

Background to the cooperation

In addition to the financial participation, Samsung E&A and Nel have concluded an EPC cooperation agreement (Engineering, Procurement, Construction). This provides for

✅ Integration of Nel's hydrogen technology: Samsung E&A will offer its customers complete hydrogen plants based on Nel's alkaline and PEM electrolyzers in the future.

✅ Development of a new balance-of-stack system: Both companies will work together on extended system integration for Nel's alkaline electrolyzers.

The aim? To strengthen global competitiveness and expand market presence!

Why is this exciting for investors?

Following the announcement, Nel ASA shares experienced an explosive rise of almost 50% on the Oslo stock exchange. This shows: Investor confidence in the long-term future of Nel is back!

Short-term effects:

📈 Strong share price reaction: Investors see Samsung E&A's investment as a vote of confidence in Nel's technology.

📊 Improved financial situation: The capital increase provides Nel with urgently needed financial resources for further growth.

Long-term potential:

🔋 Growth through South Korea's hydrogen strategy: South Korea is focusing heavily on hydrogen - Samsung could serve as a door opener for large projects.

🌍 Global expansion: The partnership can help to market Nel's electrolysers worldwide on a large scale.

🤝 Synergies with Samsung E&A: Samsung has enormous experience in large-scale projects and could scale up Nel's technology to market maturity.

Key figures:

Nel ASA published its annual report for the fourth quarter of 2024 on February 26, 2025, which provides a detailed insight into the company's financial performance.

Key financial figures for Q4 2024:

-Revenue: NOK 416 million, comparable to NOK 412 million in Q4 2023.

-EBITDA: NOK -36 million, an improvement compared to NOK -78 million in the same period last year.

-Net profit/loss: A net loss of NOK 64 million, compared to a loss of NOK 50 million in the fourth quarter of 2023.

-Order intake: NOK 148 million, an increase of 13% compared to the fourth quarter of 2023.

-Order backlog: NOK 1,614 million at the end of the quarter, a decrease of 23% compared to the previous year.

-Liquidity: A cash balance of NOK 1,876 million at the end of the quarter.

Segment analysis:

-Alkaline segment: Reported positive EBITDA of NOK 19 million, supported by higher sales, solid gross margins on device shipments and milestone payments for technology licenses.

-PEM segment: Reported negative EBITDA of NOK 22 million, mainly due to low sales in the quarter.

These figures illustrate Nel's continued efforts to improve profitability and increase operational efficiency. Despite a slight decrease in order backlog, the company remains financially solid and is well positioned to benefit from future market opportunities in the hydrogen sector.

My conclusion

This investment by Samsung E&A not only gives Nel fresh capital, but also a strong strategic partner. The close cooperation could be the game changer for Nel's future.

➡️ Are you invested in Nel ASA or other hydrogen stocks?

➡️ Do you think the hydrogen industry is on the verge of a major breakthrough?

🔗 Finanzen.net Artikel über Samsung E&A und Nel

🔗 ASA Pressemitteilung zur Samsung-Kooperation

🔗 Nel ASA Q4 2024 Finanzbericht

🔗 Wallstreet-Online zu Nels Aktienkurs

🔗 Onvista Unternehmensprofil von Nel ASA

🔗 Finanzen.net Bilanz und GUV von Nel ASA

🔗 Solarbranche.de zu Nel ASA Geschäftszahlen Q4 2024

Donald Trump wants to overturn US Chips Act + Lufthansa profits slump + DHL expects little earnings growth in 2025 + Merck aims for further profitable growth in 2024 after uprising + Kontron share price jumps to record high after order

Donald Trump wants to overturn US Chips Act

• Should the US government actually stop payments or cut commitments, this would affect many US companies: Although reporting is dominated by Intel $INTC (-0,45 %), Micron $MU (-1,01 %), Samsung $005930and TSMC $2330, which will receive up to 8.49 billion US dollars. But also Texas Instruments $TXN (-0,14 %), Applied Materials $AMAT (-0,28 %)and the University of Arizona will also receive money.
• In addition, a number of small companies are to receive between 200,000 and 300,000 US dollars. All projects can be found in a list maintained by Nist. In the case of Intel, the loss of subsidy commitments could exacerbate the current crisis.

Lufthansa $LHA (-0,02 %)Profit collapses

• Strikes, higher costs and lower ticket prices caused Lufthansa's profits to plummet last year.
• The core brand Lufthansa Airlines was even in the red in its day-to-day business, as the MDax-listed company announced in Frankfurt on Thursday.
• Group-wide operating profit before special items therefore slumped by over one billion to around 1.65 billion euros.
• For the current year, CEO Carsten Spohr is aiming for a "significant" improvement.
• The already announced restructuring program should contribute to this.
• Last year, Group airlines such as Lufthansa, Swiss, Austrian and Eurowings carried 131 million passengers, seven percent more than in the previous year.
• Turnover increased by six percent to 37.6 billion euros.
• Unlike the passenger division, the cargo subsidiary Lufthansa Cargo and the maintenance division Lufthansa Technik were also able to increase their operating profit.
• The bottom line was a Group-wide surplus of just under 1.4 billion euros, 18 percent less than in the previous year.
• Nevertheless, shareholders are to receive an unchanged dividend of 30 cents per share.

DHL $DHL (-0,72 %)expects only little earnings growth in 2025

• The logistics group DHL is implementing a cost-cutting program to combat sluggish global trade and the uncertain geopolitical situation.
• This is accompanied by the reduction of 8,000 jobs in the German mail and parcel business, as the company announced in Bonn on Thursday.
• CEO Tobias Meyer sees "both shadow and light" for the Group in the US customs policy.
• Meanwhile, the Bonn-based DAX-listed company expects only a sluggish improvement in earnings in 2025, after 2024 performed somewhat better than analysts had feared.
• "We continue to expect an operating result (EBIT) of over 7 billion euros in the medium term," Group CEO Tobias Meyer told the financial news agency dpa-AFX.
• He had previously targeted earnings before interest and taxes of more than EUR 7 billion for 2026.
• Similar to Brexit, the number of shipments is expected to decline on the one hand, while on the other hand DHL is likely to gain in added value, for example because more shipments will have to be cleared through customs.
• On this basis, earnings before interest and taxes (EBIT) are expected to increase slightly to at least EUR 6 billion in 2025.
• However, analysts surveyed by the company had estimated a median of 6.3 billion euros.
• At the same time, free cash flow is expected to remain stable at EUR 3.0 billion and thus be slightly better than expected, as in 2024.
• In 2024, the DAX-listed company earned EUR 5.9 billion in day-to-day business, a good 7 percent less than in the previous year.
• However, the operating result did not fall quite as sharply as analysts had feared.
• At 3.0 billion euros, the free cash flow was also better than experts had expected.
• DHL therefore met the targets it had set itself.
• At EUR 3.3 billion, the bottom line for shareholders in 2024 was a good 9 percent less profit than in 2023.
• The Board of Management intends to propose a stable dividend of EUR 1.85 per share at the Annual General Meeting.
• The share buyback program is to be increased by EUR 2 billion to EUR 6 billion and extended until 2026.

Merck $MRK (+0,27 %)aims to continue to grow profitably after the upswing in 2024

• After a weak previous year, day-to-day business at the pharmaceutical and technology group Merck KGaA has picked up again in 2024.
• The final quarter was above average.
• CEO Belen Garijo now wants to build on the upswing in the current year.
• "Merck is back on course for growth with all three businesses," said the manager in a statement on Thursday.
• "In 2025, we will once again grow profitably across the entire company."
• Shareholders are to receive a stable dividend of 2.20 euros for the past year.
• According to the statement, Merck is targeting sales of EUR 21.5 to 22.9 billion in the current year, which corresponds to organic growth of three to six percent.
• Adjusted for special effects, earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) are expected to increase organically by three to eight percent to EUR 6.1 to 6.6 billion.
• Last year, Group revenue climbed by 0.8 percent year-on-year to EUR 21.16 billion, supported by good business with medicines and semiconductor materials for artificial intelligence (AI).
• Since the second half of the year, there have also been signs of an upturn in the laboratory division, after the division had suffered from weak demand for a long time following the coronavirus boom.
• The Group also kept its costs in check.
• Adjusted for special effects, earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) increased by 3.3% to almost EUR 6.1 billion.
• Merck's sales and operating result were thus in line with its own targets and also more or less in line with analysts' expectations.
• Due to higher taxes, however, the Darmstadt-based company earned just under EUR 2.79 billion, around two percent less than in the previous year.

Kontron $KTN (-0,66 %)share price jumps to record high after order

• Following an order, Kontron shares reached a record high of EUR 23.34 on Wednesday.
• Most recently, the share price rose by 12.9 percent to EUR 23.18 and was one of the top positions in the small cap index SDax.
• The Austrian technology group announced a further order from the automotive industry worth 40 million euros.
• This involves the delivery of highly developed sensor technologies.
• This should at least benefit the perception of the share, commented a trader.
• On February 20, Kontron had announced an order with a total volume of 250 million US dollars over several years from a "leading supplier to the automotive industry".

Thursday: Stock market dates, economic data, quarterly figures

• ex-dividend of individual stocks
• Qualcomm USD 0.85
• BHP Group AUD 0.80

• Quarterly figures / company dates USA / Asia
• 22:00 Broadcom quarterly figures
• 22:05 Hewlett Packard Enterprise quarterly figures
• No time specified: Costco Wholesale | Universal Music Quarterly figures

• Quarterly figures / Company dates Europe
• 07:00 Lufthansa | DHL Group | Merck KGaA | Siltronic | Ströer | Zalando | Aareal Annual results
• 07:30 Compugroup Medical | Prosiebensat1 | Dürr | GFT Technologies | Air France-KLM | Bouygues Annual results
• 08:00 Deutsche Beteiligungs AG | Reckitt Benckise Annual Results
• 09:00 DHL Group Analyst Conference | Aareal Bank | Zalando BI-PK | Ströer Analyst and Press Conference
• 09:30 Lufthansa BI-PK
• 10:00 Merck KGaA PK | Siltronic Analyst Conference | Dürr BI-PK
• 10:45 Zalando Analyst Conference
• 11:00 DHL Group BI-PK
• 11:30 Prosiebensat1 BI-PK
• 12:30 Lufthansa Analyst Conference
• 14:00 Merck KGaA Analyst Conference | Dürr Analyst Conference
• 18:00 Vivendi Annual Results
• No time specified: Andritz | Solvay Annual figures

• Economic data

08:00 DE: Services turnover December

11:00 EU: Retail Sales January Eurozone FORECAST: +0.1% yoy previous: -0.2% yoy

12:00 TR: Turkish Central Bank, outcome of the Monetary Policy Council meeting Key interest rate FORECAST: n/a previously: 45.00%

14:15 EU: ECB, outcome of the Governing Council meeting and staff projection for growth and inflation in the eurozone Deposit rate FORECAST: 2.50% previously: 2.75%

14:30 US: Initial jobless claims (week) FORECAST: 235,000 previously: 242,000

14:30 US: Trade Balance January FORECAST: -128.7 bn USD previously: -98.4 bn USD

14:30 US: Productivity ex Agriculture (2nd release) 4Q annualized PROGNOSE: +1.2% yoy 1st release: +1.2% yoy 3rd quarter: +2.3% yoy Unit labor costs PROGNOSE: +3.0% yoy Preliminary: 1st release: +3.0% yoy Previously: 3rd quarter: +0.5% yoy

I would like to initiate a discussion on the occasion of the recently announced 500 billion dollar Stargate project in the USA.

Do you think it is possible for Europe to catch up with the existing technological backlog? Or is "Stargate" the final nail in the coffin? And which countries do you see at the forefront of the AI age in the future?

For me, these countries are on the winning side:

USA 🇺🇸 - The USA has been at the forefront of technology right from the start. OpenAI (ChatGPT), Alphabet $GOOGL (+0,6 %) (Gemini), Meta $META (-0,09 %) Microsoft $MSFT (-0,05 %) .... The list of companies relevant to the industry is long. Nowhere else in the world is more invested in AI. "Stargate" will now increase this imbalance many times over

China 🇨🇳 - China acts independently of the West and yet is still a major player with companies such as Tencent $TCEHY (+0,38 %) , Alibaba $BABA (+1,67 %) , Huawei, Xiaomi $1810 (+1,66 %) and Baidu $9888 (-0,67 %) are ideally positioned. Chinese companies are fast and innovative. The gigantic subsidies from the Chinese government also play a decisive role in this context. Another advantage is that the Chinese are currently receiving energy from Russia virtually as a gift.

Japan 🇯🇵 - With SoftBank, Japan has $9984 (+1,15 %) a real AI champion in its country. In Japan, NVIDIA and SoftBank $NVDA (-1,44 %) and SoftBank are building a joint innovative AI infrastructure. The fact that SoftBank and OpenAI are to be the lead partners in the Stargate project and that Masayoshi Son (CEO of SoftBank) will chair the new company will benefit Japan. The huge assets that are being built up there will flow back into the home country in one way or another. The close cooperation with the government (+high subsidies), the leading position in robotics and the recent developments in the semiconductor industry should also be noted.

Singapore 🇸🇬 - Very small country, lots of money, very good government, very well-educated population, lots of expats, lots of foreign investment, very few logistical challenges as a city state...... So things are looking VERY good for Singapore.

UAE 🇦🇪 /Saudi Arabia 🇸🇦/Qatar 🇶🇦 - Rich Gulf states that will invest billions in AI projects abroad (e.g. UAE participation in "Stargate"). They will generate large returns on these investments, while at the same time investing in the digitalization of their own country, thereby bringing great prosperity to their relatively small populations. Although there is also a large expat community in the UAE, including in the field of AI, I think that the Gulf states will mainly benefit from their investment funds.

I am unsure about these countries unsure:

Canada 🇨🇦 - Canada is innovative and wealthy, but there are not really any relevant companies in the AI sector. In addition, the universities are middle class and they lose a lot of talent to their neighbor, the USA. However, the country has potential, also because it is very attractive for foreign specialists.

Taiwan 🇹🇼 - TSMC $2330 from Taiwan supplies the world with chips, including those urgently needed for AI, but the country's heavy dependence on a single company, which has recently been expanding abroad (especially Japan and the USA), poses a risk. The development of the conflict with China and the possible success of Rapidus from Japan and Samsung in the field of 2nm chips will also be decisive for Taiwan's future in the field of AI.

South Korea 🇰🇷 - Technological leader, politically unstable. Companies like Samsung $005930 and SK Hynix $000660 from South Korea are leaders in the field of AI. There is a great deal of expertise in the country and the government is also supporting the transformation. However, I am unsure about the excessive dependence on the chaebols (e.g. Samsung), which account for an unhealthily large proportion of economic output. The dysfunctionality of the rule of law due to corrupt politicians and courts, the recent very tense domestic political situation and the constant threat from neighboring North Korea should also be viewed critically.

India 🇮🇳 - The next few years will show whether India can become the new China. India is growing dynamically and, with its 1.4 billion inhabitants, has a huge potential workforce, but it is still heavily dependent on foreign know-how. India is not as innovative as developed countries and has to deal with domestic challenges such as hunger, which could make investment in AI more difficult. Indian companies are very open to AI and are trying to adapt it quickly, but developing it is another matter.

The Netherlands 🇳🇱 - With ASML $ASML (-0,55 %) the Netherlands is home to one of the most important companies when it comes to AI. Without ASML's machines, the particularly advanced chips required for AI could not be produced. This puts the Netherlands, with its small population, in a rather comfortable position. However, it is also heavily dependent on a single company, which is also increasingly being targeted by geopolitics, with the result that the USA regularly blackmails the Netherlands to dictate where it has to deliver these machines. Recently, there have also been developments that threaten ASML's monopoly.

Germany 🇩🇪 - Germany is good at AI research, but there is a lack of AI champions. Companies such as Siemens $SIE (+0,11 %) are doing well in terms of industrial AI and SAP is also $SAP (-0,3 %) is investing heavily in its own AI, but there is still no sign of a German export hit in the field of AI. There is also a massive lack of investment in AI infrastructure and politicians are blocking rather than promoting. There is a general lack of a national vision, a combination of strategic policy and large-scale private investment, as is the case in other countries. The EU is also more of an obstacle to new investments. The concept of joint ventures is also used less in this country, although this could help to pool knowledge and resources in order to make a difference for one's own country. So all is not lost, but a political reorientation and new entrepreneurial courage are needed to catch up, which is getting bigger every day.

France 🇫🇷 - The French are also innovative and have an AI star in their country with Mistral AI, but they have similar problems to the Germans. Politics at national and EU level and the lack of major investments and new infrastructure are paralyzing the country.

UK 🇬🇧 - With universities such as Oxford and Cambridge, the UK has been conducting top-level research for a long time, including in the field of AI. They are innovative with many expats from abroad, although recently less from continental Europe. Unfortunately, however, they do not have any notable tech companies to call their own. Two of the most innovative tech companies and British hopefuls, ARM $ARM (+0,09 %)

and Graphcore, are now both owned by the aforementioned Japanese SoftBank Group, but this does not mean that the UK can no longer benefit from the positive development of these companies. Nevertheless, they are no longer British.

ConclusionIt will not be easy for Europe to catch up. The competitors are mostly fast, very financially strong, innovative and led by visionaries. We cannot compete with a fragmented capital market, slow decision-making processes and bureaucrats from Brussels. However, it is also clear that the potential is there. We (still) have many bright minds here, but without a fundamental change in policy, decisive reforms and some pioneering spirit, I believe it will be impossible to catch up. The window of opportunity is getting smaller.

How do you see it all? Do you disagree somewhere or are you missing an important country?

From sand to chip: how is a modern semiconductor made?

Reading time: approx. 10min

1) INTRODUCTION

Since 2023 at the latest and the rapid rise of Nvidia $NVDA (-1,44 %) semiconductors and "AI chips" in particular have been the talk of the town. Since then, investors have been chasing after almost every company that has something to do with the manufacture of chips, driving share prices to unimagined heights. However, hardly any investors really know how complex the value chain is within the production of modern chips.

In this article, I will give you an overview of the entire manufacturing process and the companies involved. Even if many of you have a vague idea that the production of modern chips is complex, you will certainly be surprised by how complex it really is in reality.

2) BASIC

The starting point for every chip are so-called wafers [1] - i.e. thin wafers, which usually consist of so-called high-purity monocrystalline silicon. In the field of power semiconductors, which primarily comprises chips for applications with higher currents and voltages, silicon carbide (SiC) or galium nitride (GaN) has recently also been used as the base material for the wafers.

In the so-called front end the actual core components of the chips - the so-called dies - are created and applied to the wafers. The dies are rectangular structures that contain the actual functionality of the later chip. The finished dies are then tested for their functionality and electrical properties. Each die that is found to be good is then integrated into the so-called backend where the individual dies are separated on the wafer. This is followed by the so-called packaging. The individual dies from the front end are then electrically contacted and integrated into a protective housing. In the end, this housing with the contacted die is what is usually called a chip chip.

Now that we have a rough overview of the overall process, let's take a closer look at the individual processes involved in producing the dies on the wafer. This is the area in which most highly complex machines are used and which is usually the most sensitive.

3) FROM SAND TO WAFER

Before wafers made of high-purity silicon can even be produced and the actual process for manufacturing dies can begin, the actual wafer must first be manufactured in almost perfect quality. To do this, quartz sand, which consists largely of silicon dioxide, is reduced with carbon at high temperatures. This produces so-called raw siliconwhich, with a purity of around 96%, is not yet anywhere near the quality required for the production of wafers.

In several chemical processes, which are carried out by Wacker Chemie
$WCH (+0,85 %) or Siltronic
$WAF (+0,31 %) are used to turn the "impure" silicon into so-called polycrystalline silicon with a purity of 99.9999999%. For every billion silicon atoms, there is then only one foreign atom in the silicon. However, this pure polycrystalline silicon is still not suitable for the production of wafers, as the crystal structure in the silicon is not uniform enough. In order to create the right crystal structure, the polycrystalline silicon is then melted again and a so-called ingotwhich is made from monocrystalline silicon is produced. A comparison between raw silicon and the ingot can be found in the following image [3]:

This ingot is then sawn into thin slices, which are then the final wafers for semiconductor production. The best-known wafer producers are Shin Etsu
$4063, (-1,95 %)
Siltronic or GlobalWafers
$6488.

4) FROM THE WAFER TO THE DIE

The wafers described in the previous section can now be used to produce dies. The overall process for producing dies basically consists of applying a large number of layers using various chemical, mechanical and physical processes. The overall process (depending on the product) takes approx. 80 different layers on the wafer, requiring almost 1000 different process steps and 3 months
non-stop production are required [4].

A macroscopic analogy is useful here, which I have also taken from [4]. You can compare the overall process for producing dies with baking a large multi-layer cake. This cake has 80 layers and the recipe for baking consists of 1000 steps. It takes 3 months to make the cake and if even one layer of the cake deviates from the recipe by more than 1%, the whole cake collapses and has to be thrown away.

In the first process steps, the wafer is covered with billions tiny little transistors are created on the wafer, which are then all individually electrically contacted in the following steps. The final steps consist of electrically connecting the transistors to each other, resulting in a complete electrical circuit [4]:

Each individual layer of the approximately 80 layers in the die requires highly specialized processes, which can be roughly summarized as:

• Applying masks: Photolithography, photoresist coating (applying photoresist)
• Apply material: Chemical Vapor Deposition (CVD), Physical Vapor Deposition (PVD), Atomic Layer Deposition
• Remove material: Plasma annealing, Wet annealing, Chemical Mechanical Planarization (CMP)
• Modify material: Ion Implanting, Annealing
• Material cleaning
• Inspecting the layers: Optical, Microscopical, Focused Ion Beam, Defect Inspection

Apply masks

Ultimately, a mask can be thought of as an enlarged copy of the structure of a special layer in the die. These so-called photomasks are then scanned using so-called scanners or steppers "copied" in reduced size onto the wafer. The best-known manufacturer of such lithography systems is ASML
$ASML (-0,55 %). It is currently the only producer of lithography systems that make it possible to produce structures smaller than 10 nanometers on the wafer. In today's powerful and modern chips, such as those found in smartphones, AI chips and processors, the smallest structures are around 3 nanometers in size. Other manufacturers of lithography systems for larger structures (10nm and larger) are Canon Electronics
$7739 or Nikon $7731 (+0,46 %) .

The photomasks - i.e. the enlarged "copies" of the structures - are produced by companies such as Toppan $7911 (+0,46 %) , Dai Nippon Printing
$7912 (+1,79 %) or Hoya $7741 (-1,31 %) manufactured. Systems for cleaning the photomasks or for applying the photoresist are produced, for example, by Suss Microtec
$SMHN (-0,34 %) for example.

Apply/remove/modify/clean material

As can be seen in the overview above, there are a variety of methods and processes for modifying the material of a particular layer. As a result, there is a lot of different equipment that can handle a process very well with incredible specialization. The best-known and most successful equipment manufacturers include Applied Materials $AMAT (-0,28 %), LAM Research
$LRCX (+0,05 %), Tokyo Electron (TEL)
$8035, (-1,82 %)
Suss Mictrotec, Entegris
$ENTG (+0,38 %) and Axcelis $ACLS (+0,13 %).

The material - for example, highly specialized chemicals - is of course also required for production. Companies such as Linde
$LIN (+0,22 %), Air Liquide
$AI (+0,49 %), Air Products
$APD (+0,14 %) and Nippon Sanso
$4091 (-0,78 %) are major manufacturers of process gases such as nitrogen, hydrogen and argon.

Inspect

As mentioned, every single layer in the manufacturing process of a die must be perfect in order to obtain a functional die at the end. Any small deviation or foreign particles can impair the functionality of the die. As the function of the die can only be checked precisely on the finished die, it is advantageous to inspect the individual layers for defects and deviations during production. Special machines are required for this, which must be able to do different things depending on the layer. Manufacturers of such machines include KLA
$KLAC (+0,48 %) or Onto Innovation
$ONTO (+0 %).

The following applies to almost all of the companies mentioned in this section: the companies are highly specialized and have quasi-monopolies on the machines for certain process steps. quasi-monopolies. Suitable equipment therefore usually costs several million dollars. In addition, some of the systems are so complex that they can only be serviced by the manufacturer's own service staff, which results in recurring service revenues for every machine sold. As a rule, each machine requires several highly specialized engineers to ensure long-term stable operation.

5) FROM THE DIE TO THE FINISHED CHIP

Once the wafer has been processed, the dies on the wafer are checked for functionality. There is highly specialized equipment for this, so-called probers. These probers test each individual chip several times, if necessary, to check the functionality implemented in the design. Manufacturers of such probers include Teradyne $TER (+0,36 %), Keysight Technologies
$KEYS (-0,01 %), Onto Innovation or Tokyo Electron. These probers have to control each individual die, some of which are only a few square millimetres in size, and contact the corresponding much smaller test structures with tiny needles. The testing process is sometimes outsourced to entire companies that offer die testing as a complete package. One example of such providers is Amkor Technology
$AMKR (+0,68 %).

The processed and tested wafer is now sawn to obtain individual dies. The dies that are found to be good are then integrated into a protective housing in the backend. The dies that have not passed the functionality test are either sorted out or (depending on the error pattern) processed as a variant with reduced functionality similar to those with full functionality. After a final functional test in the package, the chip is ready for use.

6) FOUNDRIES, FABLESS & SOFTWARE

Now that we have an overview of the complex process of manufacturing a chip, let's zoom out a little further to understand which companies perform which tasks in the semiconductor industry.

It's funny that not once in the manufacturing process has the name Nvidia $NVDA (-1,44 %) or Apple $AAPL (-0,05 %) has been mentioned? Yet they have the most advanced chips, don't they?

The pure production of the chips is done by other companies - so-called foundries. Companies like Nvidia and even AMD $AMD (-1,27 %) are in fact fablessThis means that they do not have their own production facilities but only supply the chip design and let the foundries manufacture the actual chip according to their design.

The design of a chip is like the blueprint for production - the foundries then take over the recipe creation and the actual production. There is special software for designing chips. Companies known for this software include Cadance Design
$CDNS (-0,19 %) and Synopsys $SNPS (+0,77 %). But also the industrial giant Siemens
$SIE (+0,11 %) now also supplies software for designing integrated circuits. Synopsys also offers other software for data analysis within foundry production.

Speaking of foundries; the best known foundry is probably TSMC
$TSM, (-0,46 %) which is the global market leader in foundries. TSMC designs itself no chips itself and specializes exclusively in the production of the most advanced generations of chips. Another major player that also masters the most advanced structure sizes is Samsung $005930. In contrast to TSMC manufactures Samsung also produces its own designs. Other large foundries are Global Foundries
$GFS, (-0,27 %) which was originally a spin-off from AMD and the Taiwanese company United Micro Electronics
$UMC. (+0,43 %)

The best-known fabless companies - i.e. companies without their own chip production - are Nvidia, Apple, AMD, ARM Holdings
$ARM, (+0,09 %)
Broadcom $AVGO (-0,35 %), MediaTek $2454 and Qualcomm $QCOM. (-0,02 %) In the meantime Alphabet $GOOGL, (+0,6 %)
Microsoft $MSFT, (-0,05 %)
Amazon $AMZN (+0,04 %) and Meta $META (-0,09 %) have designed their own chips for certain functionalities and then have them manufactured in foundries.

In addition to foundries and fabless companies, there are of course also hybrid models, i.e. companies that take on both production and design. The best-known examples of this are, of course, companies such as Intel
$INTC (-0,45 %) and Samsung. There is also a whole range of so-called Integrated Device Manufacturer (IDM)which for the most part only manufacture their own designed chips and do not accept customer orders for production. Well-known companies such as Texas Instruments
$TXN, (-0,14 %)
SK Hynix
$000660,
STMicroelectronics
$STMPA, (+0,2 %)
NXP Semiconductors
$NXPI, (-0,13 %)
Infineon $IFX (-0,13 %) and Renesas $6723 (-0,45 %) are among the IDMs.

FINAL WORD

The aim of this article was to provide an overview of the complexity of the semiconductor industry. I do not, of course no claim to be complete, as there are of course many other companies that are part of this value chain. As Getquin thrives on active exchange, I'll give you some food for thought to discuss in the comments below the article:

• feel free to link any other companies in the comments if you think I've forgotten any relevant ones
• what was the most surprising new information for you from the article?
• which companies from the article have you never heard of?
• before reading the article, did you know approximately how a modern chip is produced and what steps are necessary for this?

In general, I can recommend the 20-minute YouTube video at [4] to any interested reader. It provides an excellent animated overview of the manufacturing process of modern chips.

Stay tuned,

Yours Nico Uhlig (aka RealMichaelScott)

SOURCES:

[1] Wikipedia: https://de.wikipedia.org/wiki/Wafer

[2] https://www.halbleiter.org/waferherstellung/einkristall/

[3] https://solarmuseum.org/wp-content/uploads/2019/05/solarmuseum_org-07917.jpg

[4] Branch Education on YouTube: "How are Microchips Made?" https://youtu.be/dX9CGRZwD-w?si=xeV0TYgJ2iwNOKyO