Last Sunday, the Japanese Prime Minister achieved the best election result ever for her party. Her party received almost 70% (!!!) of the vote, which, with the exception of constitutional amendments, gives her the power to "rule through". If you were to translate the election result (just for fun) into the German party system, the CDU, FDP and AfD would have received around 90% of the vote and all left-wing parties together around 10% 😂

The Japanese benchmark index Nikkei 225 then reached a new all-time high. It is assumed that the defense and tech industries will be strengthened under her government. It wants to create more national champions and at the same time prioritizes national sovereignty. However, tensions with China's communist dictatorship could increase as, unlike her predecessors, she clearly articulates Japan's interests to the Chinese, which they visibly dislike.

What her economic agenda will look like will probably become clear in the coming weeks to months, but I am convinced that the stock markets will benefit significantly. It will probably be a mixture of tax cuts and targeted industrial policy with a focus on high technology.

All in all, I think Japan has made the right decision to combine technology leadership, national sovereignty and security interests. They now have a strong and stable government for the next few years, from which I think we can expect a lot (also for our portfolio) :)

$7012 (-2,11%)
$5801 (+2,76%)
$8035 (+6,11%)
$5344 (+1,55%)
$9984 (+3,83%)
$4063 (+5,17%)
$6324 (+0,34%)
$6702 (+0,84%)
$6701 (+0,94%)
$8306 (+1,25%)

Today I would like to introduce you to a Japanese company that is a leader in its field and can be considered indispensable for the global economy. There has been little or no coverage of this company on Getquin so far. I am talking about Shin-Etsu Chemical $4063 (+5,17%) !!

First a few words on my part:

Media coverage often suggests that the world consists only of the USA and China. The only thing that counts is who is the biggest and loudest. Who builds the most electric cars? Who builds the biggest AI model? This "duel of the giants" is currently being exploited to an exhausting extent. But if you look behind the facade, a more restrained picture often emerges. Mass production is not everything, the decisive factor is the technological basis, the so-called "bottlenecks". These bottlenecks cannot simply be copied with vast amounts of American money or Chinese workers. And it turns out that the country that controls a large number of these bottlenecks is Japan. While the West, in its arrogance, is busy explaining to its population why Japan's demographics and debts are threatening its demise, the Japanese continue to expand their technological position in a state-industry merger. However, we won't really notice any of this until TSMC's competitor Rapidus launches its innovative 2nm chip production in 2027. But let's get back to the company that I also have in my portfolio. ^_-☆

Shin-Etsu Chemical $4063 (+5,17%) is the world's leading manufacturer of silicon wafers. Their wafers reach a purity of 99.99999999999%, the result of years of research that expresses the Japanese penchant for perfection. They control around 33% of the market, but this share increases as the complexity of the chips increases. Another special feature is that they attach great importance to vertical integration. They also produce the required preliminary products themselves (unlike their competitors) and are therefore largely independent of supply chain problems. In addition, they deliver on time almost 100% of the time, which is a form of reliability that can only be made possible by this structure. Furthermore, they have a market share of 25-30% for photoresists (essential for EUV in particular), 50% for photomask blanks (stencil for wafer exposure -> demand increases for smaller structures) and they are also leaders in advanced packaging. For advanced packaging, their high-end thermal interface materials stand out in particular, which are crucial for thermal management (they control around 50% of the market). Also interesting are their resins specially developed for HBM, which fill the gaps between the stacked chips (about 25% in memory stacking). They continue to expand their position in both areas of the AP. Due to the enormous complexity and purity of their chemicals, they also have a very strong moat, one that has been strengthened by decades of research and specialization. Independently of chip production, they are also an important producer of plastics, especially in the USA, where they dominate the market for PVC.

Market capitalization (current): approx. € 60 billion

P/E ratio (current): approx. 22

Sales (2026e): approx. € 14 bn

Profit (2026e): approx. € 3 bn

One relevant future project is the introduction of gallium nitride (GaN), which is particularly suitable for power semiconductors as it is more energy-efficient than conventional silicon. It is expected to play an increasingly important role in the coming years. Shin-Etsu Chemical was the first company to produce GaN as a 300mm wafer. If this goes into mass production, it will be an important growth area for the company. Another company to watch out for is Rapidus, mentioned earlier, because when it starts mass production, Shin-Etsu will be the supplier of choice and will have a large new customer to serve.

Finally, it should also be mentioned that the company's finances are more than robust. They have virtually no debt and are sitting on a mountain of cash, which allows them to easily finance projects such as the new factory in Gunma Prefecture and remain agile even in cyclical downturns.

Overall, it can be said that Shin-Etsu Chemical is the world's leading materials supplier to the semiconductor industry, with the purest chemicals, the strongest research, the soundest finances and geopolitical momentum. The government stands by them in all their initiatives to secure their supremacy. The semiconductor industry still has big growth years ahead and Shin-Etsu Chemical is the (moderately valued) shovel seller of choice. Without this company, the industry would not be able to survive at this level. One could say that the success of players like TSMC $2330 Samsung $005930 Intel $INTC (+2,73%) and others is directly linked to that of Shin-Etsu Chemical.

Since several major banks have just expressed their optimism about Japanese stocks, I am considering making more contributions on other Japanese hidden champions. I also have a few lesser-known ones in my portfolio. If you would be interested, please let me know. :)

After my first post on humanoid robots received a lot of positive feedback, I went into more detail. I later added my favorites in each sector.

In-depth analysis of the value chain, including shovel manufacturers and potential hidden champions

New category: Secondary Key Sectors (Sales, Marketing, Financing)

Additionally: Top 25 companies worldwide, as well as the Top 10 in Europe and the Top 10 in Asia

To help newcomers get up to speed, I’ve included a video link. This will give you an idea of just how far the development of humanoid robotics has come today.

https://www.stern.de/panorama/wissen/humanoider-roboter---wie-reagiert-er-auf-beleidigungen--35996156.html

Thank you for your attention and support 🙏

🌐 1. Humanoid Robot Value Chain (with hidden champions)

1. Research & Chip Design

$ARM (+10,7%) ARM (UK) – CPU IP, energy-efficient processors

$SNPS (+1,05%) Synopsys (US) – EDA software, chip design

$CDNS (+3,38%) Cadence (US) – EDA & Simulation

$PTC PTC (US) – Engineering software, CAD/PLM

$DSY (+0,66%) Dassault Systèmes (FR) – 3D design & digital twin

$SIE (+2,59%) Siemens (DE) – Industrial software & lifecycle management

$ADBE (+0,53%) Adobe (US) – Design, AR/UX

ANSYS (US) – Multiphysics Simulation – Acquired by Synopsys

Altair (US) – CAE, Simulation, Digital Twin – Acquired by Siemens

$HXGBY (-1,04%)
Hexagon (SE) – Measurement Technology & Simulation

$AWE Alphawave IP Group (UK) – High-speed chip IP for AI/robotics

1. Synopsis, 2. Siemens, and 3. Adobe are my top three picks in this sector

2. Manufacturing Technology & Equipment

$ASML (+2,18%) ASML (NL) – Lithography (EUV)

$AMAT (+3,54%) Applied Materials (US) – Semiconductor Equipment

$8035 (+6,11%) Tokyo Electron (JP) – Wafer manufacturing

$KEYS (+1,31%) Keysight Technologies (US) – Measurement Technology

$6857 (+7,31%) Advantest (JP) – Chip Test Systems

$TER (+3,96%) Teradyne (US) – Test systems + cobots

$6954 (+5,13%) Fanuc (JP) – Industrial robots, CNC

$CAT (-1,21%) Caterpillar (US) – Autonomous Machinery

$KU2G KUKA (DE) – Industrial Robots

Comau (IT) – Automation – Not publicly traded

$ROK Rockwell Automation (US) – Industrial automation

$JBL (+2,18%) Jabil (US) – Contract Manufacturing (EMS/ODM)

$KIT (+3,17%) Kitron (NO) – European EMS/ODM manufacturer

$AIXA (+4,95%) Aixtron (DE) – Deposition systems for compound semiconductors

$LRCX (+6,85%)
Lam Research (US) – Etching/deposition systems

$MKSI (+5,3%)
MKS Instruments (US) – Plasma/vacuum technology

$ASM (+2,15%)
ASM International (NL) – Deposition systems

1. ASML, 2. Keysight Technologies, 3. Fanuc are my top 3 in this sector

3. Chip Manufacturing (Foundries)

$TSM (+0,13%) TSMC (TW) – leading foundry

$SMSN Samsung Electronics (KR) – foundry + memory

$GFS (+2,99%) GlobalFoundries (US) – specialty chips

$INTC (+2,73%)
Intel Foundry Services (US) – new Western foundry player

$981
SMIC (CN) – Largest Chinese foundry

$UMC (+0,92%)
UMC (TW) – Power, RF, and embedded chips

1. TSMC, 2. Intel, 3. Samsung Electronics are my top 3 in this sector

4. Computing & control unit (“brain”)

$NVDA (-0,51%) Nvidia (US) – GPUs, AI chips

$INTC (+2,73%) Intel (US) – CPUs, FPGAs

$AMD (+5,66%) AMD (US) – CPUs, GPUs

$MRVL (+4,97%) Marvell (US) – network chips

$MU (+5,22%) Micron (US) – Memory

$DELL (+3,91%) Dell Technologies (US) – Edge & Infrastructure

Graphcore (UK) – AI chips (IPU) – not a publicly traded company

Cerebras (US) – Wafer-Scale Engine – not a publicly traded company

SiPearl (FR) – European HPC chip – not a publicly traded company

1. Nvidia, 2. Marvell, 3. Micron are my top 3 in this sector

5. Sensors (“Senses”)

$6758 (-1,08%) Sony (JP) – Image sensors

$6861 (+2,4%) Keyence (JP) – industrial sensors

$STM (+5,04%) STMicroelectronics (FR/IT) – Sensors, MCUs

$TDY Teledyne (US) – optical/infrared sensors

$CGNX (+2,6%) Cognex (US) – Machine Vision

$HON Honeywell (US) – Sensors, Security

ANYbotics (CH) – Autonomous sensor fusion – not a publicly traded company

$AMBA (+4,34%) Ambarella (US) – Video & computer vision SoCs for real-time image recognition

$OUST
Velodyne Lidar (US) – Lidar sensors – acquired by Ouster

$AMS (+7,14%)
OSRAM (AT/DE) – optical sensors

1. Teledyne, 2. Keyence, 3. Ouster are my top 3 in this sector

6. Actuators & Power Electronics (“Muscles”)

$IFX (+3,47%) Infineon (DE) – Power Electronics

$ON (+5,12%) onsemi (US) – Power & Sensors

$TXN (+2,23%) Texas Instruments (US) – mixed-signal chips

$ADI (+2,62%) Analog Devices (US) – Signal Processing

$PH Parker-Hannifin (US) – Hydraulics/Pneumatics

$MP (-2,1%) MP Materials (US) – Magnets

$APH (+2,48%) Amphenol (US) – Connectors

$6481 (+4,99%) THK (JP) – Linear guides & actuators

$6324 (+0,34%)
Harmonic Drive (JP) – Precision gearboxes & servo drives for robotics

$6594 (+0,44%)
Nidec (JP) – Electric motors

$6506 (+1,24%)
Yaskawa (JP) – Drives & Robotics

$SU (+1,98%)
Schneider Electric (FR) – Energy & Control Solutions

$ZIL2 (+0,71%)
ElringKlinger (DE) – Battery & Fuel Cell Technology, Lightweight Construction

1. Parker-Hannifin, 2. MP Materials, 3. Infineon are my top 3 in this sector

7. Communications & Networking (“Nerves”)

$QCOM (+2,77%) Qualcomm (US) – Mobile Communications, Edge AI

$ANET (+1,68%) Arista Networks (US) – Networks

$CSCO (+4,13%) Cisco (US) – Networks, Security

$EQIX (+1,67%) Equinix (US) – Data centers

NTT Docomo (JP) – 5G/6G carrier – not a publicly traded company

$VZ Verizon (US) – Telecommunications

$SFTBY SoftBank (JP) – Carrier + Robotics

$ERIC B (+5,37%)
Ericsson (SE) – 5G/IoT infrastructure

$NOKIA (+8,31%)
Nokia (FI) – 5G/6G for Industry

$HPE (+10,21%)
Juniper Networks (US) – Networking – Acquired by HP

1. Arista Networks, 2. SoftBank, 3. Cisco are my top 3 in this sector

8. Energy

$3750 (+3,07%) CATL (CN) – Batteries

$6752 (+4,28%) Panasonic (JP) – Batteries

$373220 LG Energy (KR) – Batteries

$ALB (-0,15%) Albemarle (US) – Lithium

$LYC (-1,69%) Lynas (AU) – Rare Earths

$UMICY (+0,4%) Umicore (BE) – Recycling

WiTricity (US) – Inductive charging – not a publicly traded company

$ABBN (+2,35%) Charging (CH) – Charging infrastructure

$SLDP
Solid Power (US) – Solid-state batteries

Northvolt (SE) – European batteries – not a publicly traded company

$PLUG (-3,03%)
Plug Power (US) – Fuel cells

$KULR (-1,37%)
KULR Technology (US) – Thermal management & battery safety for mobile systems

1. Albemarle, 2. CATL, 3. Panasonic are my top 3 in this sector

9. Cloud & Infrastructure

$AMZN (+1,16%) Amazon AWS (US) – Cloud, AI

$MSFT (+0,18%) Microsoft Azure (US) – Cloud, AI

$GOOG (-0,89%) Alphabet Google Cloud (US) – Cloud, ML

$VRT
Vertiv Holdings (US) – Data Center Infrastructure (UPS, Cooling, Edge)

$ORCL (+2,55%)
Oracle Cloud (US) – ERP + Cloud

$IBM (-2,67%)
IBM Cloud (US) – Hybrid Cloud + AI

$OVH (+0,4%)
OVHcloud (FR) – European Cloud

1. Alphabet, 2. Microsoft, 3. Oracle are my top 3 in this sector

10. Software & Data Platforms

$PLTR (-2,48%) Palantir (US) – Data Integration

$DDOG (+2,95%) Datadog (US) – Monitoring

$SNOW (+1,53%) Snowflake (US) – Data cloud

$ORCL (+2,55%) Oracle (US) – Databases, ERP

$SAP (+0,32%) SAP (Germany) – ERP systems

$SPGI S&P Global (US) – Financial/Market Data

ROS2 Foundation – Robotics Middleware – Not publicly traded

$NVDA (-0,51%) NVIDIA Isaac (US) – Robotics development – part of NVIDIA

$INOD (+1,16%) Innodata (US) – Data annotation & AI training data

$PATH (+3,49%)
UiPath (RO/US) – Robotic Process Automation

$AI (+1,3%)
C3.ai (US) – AI platform

$ESTC (+2,85%)
(NL/US) – Search & Data Analytics

1. S&P Global, 2. Palantir, 3. Datadog are my top 3 in this sector

11. End-user applications / Robots

$ABBN (+2,35%) ABB (CH/SE) – Industrial robots

$6954 (+5,13%) Fanuc (JP) – Industrial Robots

$TSLA (+3,27%) Tesla Optimus (US) – humanoid robot

$9618 (+0,42%) JD.com (CN) – Logistics robots

$AAPL (+0,66%) Apple (US) – Platform & UX

$700 (-2,01%) Tencent (CN) – Platform & AI

$9988 (+0,84%) Alibaba (CN) – Logistics & Platform

PAL Robotics (ES) – humanoid robots - not a publicly traded company

Neura Robotics (DE) – cognitive humanoid robots - not a publicly traded company

$TER (+3,96%) Universal Robots (DK) – cobots - part of Teradyne Corporation

Engineered Arts (UK) – humanoid robots – not a publicly traded company

$ISRG (-0,6%) Intuitive Surgical (US) – surgical robotics

$GMED (-0,87%)
Globus Medical (US) – surgical robotics (ExcelsiusGPS platform)

$7012 (-2,11%) Kawasaki Heavy Industries (JP) – industrial robots, automation

$CPNG (+0,81%) Coupang (KR) – logistics end-users

$IRBT
iRobot (US) – consumer robotics (e.g., Roomba); not humanoid, but features navigation and sensor fusion

Boston Dynamics (US) – humanoid & mobile robots—not a publicly traded company

Hanson Robotics (HK) – humanoid robots (Sophia)—not a publicly traded company

Agility Robotics (US) – “Digit” humanoid robot—not a publicly traded company

1. Apple, 2. Tencent, 3. Alibaba are my top 3 in this sector

🛠 2. Cross-sector enablers (shovel manufacturers) – featuring hidden champions

Raw Materials & Battery Materials

Albemarle · Lynas · Umicore

$SQM
SQM (CL) – Lithium

$ILU (-0,9%)
Iluka Resources (AU) – Rare Earths

$ARR (+1,67%)
American Rare Earths (US/AU) – New supply chains

My top pick in the sector is Albemarle

Manufacturing Technology

ASML · Applied Materials · Tokyo Electron

$LRCX (+6,85%)
Lam Research (US) – Plasma/etching processes

$ASM (+2,15%)
ASM International (NL) – ALD equipment

$MKSI (+5,3%)
MKS Instruments (US) – Plasma/vacuum technology

My top pick in the sector is ASML

Quality Assurance

Keysight · Advantest · Teradyne

$EMR (+1,13%)
National Instruments (US) – Measurement technology – from Emerson Electric Acquired

$300567
ATE Test Systems (CN) – Test systems

$FORM (+6,77%)
FormFactor (US) – Wafer probing

My number one in the sector is Keysight

Motion & Drive

Parker-Hannifin

Festo (Germany) – Pneumatics, Soft Robotics - not a publicly traded company

Bosch Rexroth (DE) – Drives, Controls - not a publicly traded company

$6481 (+4,99%)
THK (JP) – Linear guides

My top choice in the sector is Parker-Hannifin

Sensors/Imaging

$TDY Teledyne

$BSL (+3,75%) Basler (DE) – Industrial cameras

FLIR (US) – Thermal imaging sensors – Acquired by Teledyne

ISRA Vision (DE) – Machine vision – not a publicly traded company

My top pick in the sector is Teledyne

Magnets & Materials

MP Materials

$6501 (-1,05%)
Hitachi Metals (JP) – Magnetic Materials

VacuumSchmelze (DE) – Magnetic materials – not a publicly traded company

$4063 (+5,17%)
Shin-Etsu Chemical (JP) – Specialty materials

My top pick in the sector is MP Materials

Chip Design & Simulation

Synopsys · Cadence · ARM

$SIE (+2,59%)
Siemens EDA (DE/US)– Mentor Graphics—a strategic business unit of Siemens AG

Imagination Tech (UK) – GPU IP – not a publicly traded company

$CEVA (+6,23%)
CEVA (IL) – Signal processor IP

My top pick in the sector is Synopsys

Engineering & Lifecycle

PTC · Dassault · Siemens

Altair (US) – Simulation – no longer a publicly traded company

$HXGBY (-1,04%)
Hexagon (SE) – Measurement Technology

$SNPS (+1,05%)
ANSYS (US) – Simulation – Acquired by Synopsys

My top pick in the sector is Siemens

Networks & Data Centers

Arista · Cisco · Equinix

$HPE (+10,21%)
Juniper (US) – Networks – Acquisition by HPE

$DTE (-0,84%)
T-Systems (DE) – Industrial Cloud

$OVH (+0,4%)
OVHcloud (FR) – European cloud

My top pick in the sector is Arista

Cloud Infrastructure

AWS · Azure · Google Cloud

$ORCL (+2,55%)
Oracle Cloud (US) – ERP & Databases

$IBM (-2,67%)
IBM Cloud (US) – Hybrid Cloud

$9988 (+0,84%)
Alibaba Cloud (CN) – Asian cloud

$VRT
Vertiv Holdings (US) – Cloud/Infrastructure

My top pick in the sector is Alphabet (Google)

Financial/Information Infrastructure

S&P Global

$MCO (+0,47%)
Moody’s (US) – Ratings

$MSCI (-0,15%)
MSCI (US) – Indices

$MORN
Morningstar (US) – Investment Research

My top pick in the sector is S&P Global

Creative/Experience Infrastructure

Adobe

$ADSK (+1,72%)
Autodesk (US) – CAD & Design

$U
Unity (US) – 3D/AR Simulation

Epic Games (US) – Unreal Engine – not a publicly traded company

My top pick in the sector is Adobe

Platform & Ecosystem

Apple · Tencent · Alibaba

$META (+3,87%)
Meta (US) – AR/VR, Social Robotics

ByteDance (CN) – AI & Platforms – not a publicly traded company

$9888 (-0,16%)
Baidu (CN) – AI & Cloud

My top pick in the sector is Tencent

Infrastructure/Edge

Dell

$HPE (+10,21%)
HPE (US) – Edge Computing

$SMCI
Supermicro (US) – AI Servers

$6702 (+0,84%)
Fujitsu (JP) – Edge & HPC

My top pick in this sector is Dell

Storage Solutions

Micron

$HY9H
SK Hynix (KR) – Memory

$285A (+9,18%)
Kioxia (JP) – NAND

$WDC
Western Digital (US) – Storage solutions

My top pick in the sector is Micron

🏛 3. Secondary Key Sectors with Hidden Champions

Financing & Capital

$GS (+2,99%) Goldman Sachs (US) – Investment bank; ECM/DCM, M&A, growth financing

$MS Morgan Stanley (US) – Investment bank; tech banking, capital markets

$BLK (+3,08%) BlackRock (US) – Asset manager; capital allocation, ETFs/index funds

$9984 (+3,83%) SoftBank Vision Fund (JP) – Mega-VC; growth equity in robotics/AI

Sequoia Capital (US) – Venture capital; early-stage/growth in AI/robotics – This is a classic venture capital fund

DARPA (US) – government R&D funding (robotics/defense) – independent research and development agency

EU Horizon (EU) – research funding/grants for DeepTech – Innovative Europe pillar

China State Funds (CN) – Government Industry/Technology Funds

Lux Capital (US) – VC for DeepTech - Uptake (US) – AI-based predictive maintenance

DCVC (US) – Focus on robotics and AI – Invests exclusively through VC fund investments

Speedinvest (AT) – EU VC for robotics – Investment is only available through fund participations

My number one in the sector is SoftBank

Maintenance & Service

$SIE (+2,59%) Siemens (DE) – Industrial Services, Lifecycle & Retrofit

$ABBN (+2,35%) ABB (CH/SE) – Robotics services, spare parts, field support

$GEHC (-0,49%) GE Healthcare (US) – Medtech services, including robotic systems

Uptake (US) – AI-based predictive maintenance – not a publicly traded company

Augury (US/IL) – Condition monitoring, condition diagnostics – not a publicly traded company

$KU2 KUKA Service (DE) – Robotics maintenance

$6954 (+5,13%) Fanuc Service (JP) – Global service network

Boston Dynamics AI Institute (US) – Robotics Longevity – funded by Hyundai Motor Group

My top pick in the sector is Siemens

Marketing & Advertising

$WPP (+1,67%) WPP (UK) – global advertising group; branding/communications

$OMC Omnicom (US) – marketing/PR network

$PUB (+1,11%) Publicis (FR) – communications/advertising group

$META (+3,87%) Meta (US) – digital ads (Facebook/Instagram)

$GOOG (-0,89%) Google Ads (US) – Search & Display Advertising

TikTok / ByteDance (CN) – Social Ads & Distribution - not a publicly traded company

$AAPL (+0,66%) Apple (US) – branding/UX; adoption & platform marketing

$WPP (+1,67%)
AKQA (UK/US) – Tech branding – Since 2012, majority-owned by the WPP Group, but continues to operate as autonomous operating unit

R/GA (US) – Innovation Marketing – not a publicly traded company

Serviceplan (DE) – Largest independent EU agency – not a publicly traded company

My number one in the sector is Meta

Law, Regulation & Ethics

ISO (CH) – international standards, robotics standards

TÜV (DE) – certification & safety testing

UL (US) – safety/conformity testing

EU AI Act (EU) – legal framework for AI & robotics

UNESCO AI Ethics (UN) – global ethical guidelines

Fraunhofer IPA (DE) – Robotics safety standards

ANSI (US) – Standards

IEC (CH) – Electrical Engineering Standards

Education & Talent

MIT (US) – Robotics/AI Research & Education

ETH Zurich (CH) – Autonomous Systems & Robotics

Stanford (US) – AI/Robotics Labs & Spin-offs

Tsinghua University (CN) – Robotics/AI in Asia

CMU (US) – Robotics Institute

EPFL (CH) – Robotics Research

TU Munich (DE) – “Roboy” humanoid robot

🌍 Top 25 Companies in Humanoid Robotics

These companies are crucial to the development and production of humanoid robots, because without them, crucial parts of the chain would be missing:

Chips & computing power (the robots’ brains)

$NVDA (-0,51%) Nvidia (US) – AI GPUs & Isaac platform, the foundation for robotics AI

$2330 TSMC (TW) – the world’s leading foundry, produces AI chips

$ASML (+2,18%) ASML (NL) – EUV lithography, indispensable for chip manufacturing

$005930 Samsung Electronics (KR) – memory, logic, foundry

$HY9H SK Hynix (KR) – DRAM & NAND memory for AI

$MU (+5,22%) Micron (US) – memory solutions for AI workloads

My top pick in the sector is ASML

Sensors & Perception (Robots’ Senses)

$SONY Sony (JP) – Image sensors, market leader

$6861 (+2,4%) Keyence (JP) – Industrial Sensors & Vision Systems

$CGNX (+2,6%) Cognex (US) – Machine vision, precise image processing

My top pick in this sector is Keyence

Actuators & Motion (Robot Muscles)

$IFX (+3,47%) Infineon (DE) – Power Electronics, Motor Control

$6594 (+0,44%) Nidec (JP) – Global market leader in electric motors

$PH Parker-Hannifin (US) – Hydraulics/Pneumatics, Motion Control

$6481 (+4,99%) THK (JP) – Linear guides & actuators

My top pick in this sector is Parker-Hannifin

Communications, Cloud & Infrastructure (Nerves & Data Flow)

$QCOM (+2,77%) Qualcomm (US) – Mobile & edge chips

$AMZN (+1,16%) Amazon AWS (US) – Cloud & AI infrastructure

$MSFT (+0,18%) Microsoft Azure (US) – Cloud, AI services

$CSCO (+4,13%) Cisco (US) – Networks & Security

$VRT Vertiv Holdings (US) – Data Center Infrastructure

My top pick in this sector is Microsoft

End-User Applications & Platforms (Robots Themselves)

$TSLA (+3,27%) Tesla (US) – humanoid robots Optimus

$ABBN (+2,35%) ABB (CH/SE) – Robotics & Automation

$6954 (+5,13%) Fanuc (JP) – industrial robots & CNC systems

$7012 (-2,11%) Kawasaki Heavy Industries (JP) – industrial robots

PAL Robotics (ES) – humanoid robots (TALOS, ARI, TIAGo) – not a publicly traded company

Neura Robotics (DE) – cognitive humanoid robots – not a publicly traded company

Universal Robots (DK) – cobots

My top pick in the sector is Tesla

🇪🇺 Top 10 European Key Companies in Humanoid Robotics

$ASML (+2,18%)
ASML (NL)

Global market leader in EUV lithography – without ASML, there would be no modern chips for AI & robotics.

$IFX (+3,47%) Infineon (DE)

A leader in power electronics and motor control—crucial for the actuators of humanoid robots.

$STM (+5,04%)
STMicroelectronics (FR/IT)

Sensors, microcontrollers, and power chips—the foundation for control and perception.

$SAP (+0,32%)
SAP (DE)

ERP & data platforms, essential for integrating humanoid robots into industrial processes.

$SIE (+2,59%)
Siemens (DE)

Industrial software, automation, Digital Twin—key to engineering and lifecycle management.

$KU2 KUKA (DE)

Robotics pioneer, industrial robots & automation—expertise in humanoid motion mechanics.

PAL Robotics (ES) - not a publicly traded company

Specialist in humanoid robots (TALOS, ARI, TIAGo), used internationally in research and service.

Neura Robotics (DE) - not a publicly traded company

Young high-tech company developing cognitive humanoid robots with advanced AI (4NE-1).

Universal Robots (DK) - not a publicly traded company

Market leader in cobots—a platform for safe human-robot collaboration.

Engineered Arts (UK) - not a publicly traded company

Develops humanoid robots such as Ameca, known for realistic facial expressions and gestures—important for HRI (Human-Robot Interaction)

🌏 Top 10 Key Asian Companies in Humanoid Robotics

$2330
TSMC (Taiwan)

The world’s largest semiconductor foundry, producing high-end chips (e.g., Nvidia, AMD, Apple)—without TSMC, there would be no AI hardware.

$005930
Samsung Electronics (South Korea)

Foundry, memory, logic chips, image sensors—extremely broad portfolio of robotics components.

$HY9H
SK Hynix (South Korea) – Memory

$SONY
Sony (Japan)

Market leader in CMOS image sensors, essential for robotic vision and perception.

$6861 (+2,4%)
Keyence (Japan)

Sensors and machine vision for industrial automation, widely used in robotics.

$6954 (+5,13%)
Fanuc (Japan)

Industrial robots and CNC systems; one of the world’s leading manufacturers of robotics hardware.

$6506 (+1,24%)
Yaskawa Electric (Japan)

Drives, motion control, and robotic arms—relevant for humanoid motion control.

$6594 (+0,44%)
Nidec (Japan)

Global market leader in electric motors (ranging from mini motors to high-performance drives).

$7012 (-2,11%)
Kawasaki Heavy Industries (JP) – Industrial robots

$9618 (+0,42%)
JD.com (China)

A driving force in robotics for e-commerce and logistics; invests in humanoid robotics applications

$4063 (+5,17%) Good news for all those invested in Shin-Etsu.

Shin-Etsu Chemical Co, Ltd (TSE:4063) announces a share repurchase program. Under the program, the company will repurchase up to 200,000,000 shares, representing 10.2% of its total shares outstanding excluding treasury shares, for a total of ¥500,000 million. The purpose of repurchase program is to improve capital efficiency and enhance shareholders?

returns. The repurchased shares will be canceled. The repurchase program is valid until April 24, 2026.

A few days ago I took another strike and doubled my position.

Reading time: approx. 10min

1) INTRODUCTION

Since 2023 at the latest and the rapid rise of Nvidia $NVDA (-0,51%) 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 production 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 production 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 the 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 (+4,92%) or Siltronic
$WAF (+12,41%) 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, (+5,17%)
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 it 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 (+2,18%). 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 (+1,13%) .

The photomasks - i.e. the enlarged "copies" of the structures - are produced by companies such as Toppan $7911 (+0,35%) , Dai Nippon Printing
$7912 (+0,29%) or Hoya $7741 (+3,08%) manufactured. Systems for cleaning the photomasks or for applying the photoresist are produced, for example, by Suss Microtec
$SMHN (+8,22%) 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 (+3,54%), LAM Research
$LRCX (+6,85%), Tokyo Electron (TEL)
$8035, (+6,11%)
Suss Mictrotec, Entegris
$ENTG (+5,76%) and Axcelis $ACLS (+5,73%).

The material - for example, highly specialized chemicals - is of course also required for production. Companies such as Linde
$LIN (-0,06%), Air Liquide
$AI (-0,68%), Air Products
$APD (-0,33%) and Nippon Sanso
$4091 (+0%) 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 (+4,16%) or Onto Innovation
$ONTO (+8,79%).

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 maintained by the manufacturer's own service staff, which ensures recurring service revenue 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 (+3,96%), Keysight Technologies
$KEYS (+1,31%), 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 (+8,05%).

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 (-0,51%) or Apple $AAPL (+0,66%) 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 (+5,66%) 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 (+3,38%) and Synopsys $SNPS (+1,05%). But also the industrial giant Siemens
$SIE (+2,59%) 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, (+0,13%) 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, (+2,99%) which was originally a spin-off from AMD and the Taiwanese company United Micro Electronics
$UMC. (+0,92%)

The best-known fabless companies - i.e. companies without their own chip production - are Nvidia, Apple, AMD, ARM Holdings
$ARM, (+10,7%)
Broadcom $AVGO (+3,7%), MediaTek $2454 and Qualcomm $QCOM. (+2,77%) In the meantime Alphabet $GOOGL, (-1,03%)
Microsoft $MSFT, (+0,18%)
Amazon $AMZN (+1,16%) and Meta $META (+3,87%) 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 (+2,73%) 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, (+2,23%)
SK Hynix
$000660,
STMicroelectronics
$STMPA, (+4,91%)
NXP Semiconductors
$NXPI, (+2,94%)
Infineon $IFX (+3,47%) and Renesas $6723 (+4,37%) 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 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

Hello everyone,

Today I would like to introduce you to my portfolio. As you probably know, it's just too much fun to expand my portfolio with new stocks. There are now a few too many, but I still can't really part with my worst-performing stocks ($NVM (-3,01%) , $ENPH (+4,78%) , $WAC (+1,22%) ). I'm hoping that I'll be able to sell them in positive territory at some point, or am I on the wrong track and in your opinion should I sell at a loss and try to make up the loss with other stocks?

I have been investing since the end of 2022 and at 29 years old, I still have a long time to go. My strategy is to be as desertified as possible in sectors and to beat the market in the long term (just let me believe that it works :D), hence so many individual stocks. I want to hold these for many years (esp. $AMZN (+1,16%) , $GOOGL (-1,03%) , $QCOM (+2,77%) , $MSFT (+0,18%) , $V (+0%) , $MC (+1,47%) , $SALM (+1,88%) ) but I'm also not too keen to pocket the profits. Are there any stocks in my portfolio that you would view critically for the next few years and would be worth considering selling? Recession and all that...

Priority is on growth, which is reasonably safe, so only a few small caps - but a few bets have to be in there :) ($AIDX (+0,85%) , $NRX (-2,08%) , $ITM (+1,4%) , $F3C (+0,81%) , $MITK (+5,23%) ). But with rather small amounts, probably too small or what do you say?

At the same time, I would also like to claim a €900 allowance via dividends ( $BATS (-1,99%) , $ENB (-0,47%) , $BNPQY (+0,81%) , $STLAM (-0,93%) , $ENGI (+0,71%) , $RIO (-0,1%) ) and secure a trade or two.

Recently I have been investing 240€/m in the $XDWD (+0,78%) and between 200 - 500€/m in individual shares (depending on what is left). Actually, I want to increase the existing shares properly now, but somehow there are always nice entry options in solid companies like $0L2T (-2,64%) , $ZTS (-0,24%) , $ADM (-1,15%) , $PANW (+5,26%) , $ENR (+2,58%) . Help what to do? :D

And then there's also crypto $BTC (-0,16%)
$NEAR (-0,01%)
$ADA (-0,13%)

And Japan, they're doing well too $4063 (+5,17%) , $6501 (-1,05%) , $8001 (+1,27%)

Looking forward to your feedback and advice!

++Linde and other industrial gas producers in comparison++

1. business model of $LIN (-0,06%)
1]

Linde PLC is an industrial gases and engineering company. The company's business consists of two core product lines: Industrial Gases and Engineering. The main products of the industrial gases business are atmospheric gases such as oxygen, nitrogen, argon and noble gases, and process gases such as carbon dioxide, helium, hydrogen, electronic gases, specialty gases and acetylene.

The company designs, engineers and builds industrial gas production plants and provides customers with a range of gas production and processing services, such as olefin plants, natural gas plants, air separation plants, hydrogen and synthesis gas plants and other types of plants.

Employee Satisfaction: [2]

Average rating:

According to the review portal kunuu, workers are satisfied with their employer on average. The company scores a 3.4 out of 5, and has a 50% recommendation rate. The biggest problem of the German workers stands out more clearly: the aggressive company culture. Many layoffs and poor chances of being hired.

Salary:

The majority of workers are happy with salaries at Linde. And rightly so. Rich starting salaries attract qualified employees to the company. Key positions at the company would include:

Engineer: 80,500€ / Buyer: 85,300€ / Project Manager: 97,900€.

General:

It should be noted that I underestimated Linde quite a bit. I was aware that Linde is a big player in the gas business, but the fact that Linde is the world market leader in industrial gases [3], besides AirLiquid, surprised me quite a bit. The chart alone in comparison to Airproducts and Shin-Etsu is a real treat... (picture is attached/ By the way, I would appreciate it if you could finally insert pictures between text, this would help the reading flow significantly)

Is Linde "too big to fail"?

Modern industrial gases are one of the components that make up the engine of modern industry. Without industrial gases, many "normal" products such as plastics or fertilizers would no longer be able to be manufactured. Industrial gases are accordingly indispensable! For example, without chlorine and ethylene, plastic could no longer be produced, or without nitrogen and ammonia, ammonia could no longer be produced. It is also interesting to note that without argon and helium, the semiconductor industry would no longer be able to produce (all products of Linde).

Prospects for industrial gases: [4]

Political and societal pressures, at least here in Germany, are increasing demand for alternatives to conventional oil, benefiting low-CO2 technologies such as hydrogen. In addition, more efficient mechanisms are being invented to improve the efficiency of industrial gases. Whether hydrogen propulsion will become widely accepted as a replacement for the internal combustion engine is questionable - industrial gases already seem to be more attractive for large means of transportation such as trucks or even airplanes. As already mentioned above, industrial gases are indispensable for chemical/medical and some technological industries.

2. key figures in comparison (Linde(DE) vs. Airproducts(USA) $APD (-0,33%)
vs. Shin-Etsu $4063 (+5,17%)
(JPN)) [5]

a. Sales and profit growth (EBIT)

Sales growth over the last 5 years:

Linde: 23.88% / Airproducts 9.17% / Shin-Etsu 3.18%

EBIT growth over the last 5 years:

Linde:

- 2018-2019: (-42%)

- 2019-2020: (15,61%)

- 2020-2021: (50,68%)

- 2021-2022: (8,71%)

- Average growth rate: 6.6%

Airproducts:

- 2018-2019: (13,62%)

- 2019-2020: (5,87%)

- 2020-2021: (3,45%)

- 2021-2022: (9,86%)

- Average growth rate: 6.56%

Shin-Etsu:

- 2018-2019: (22,4%)

- 2019-2020: (2,58%)

- 2020-2021: (-5,6%)

- 2021-2022: (73,11%)

- Average growth rate: 18.5%

Average 5-year EBIT growth trend:

Linde: 6.6% / Airproducts: 6.56%/ Shin-Etsu 18.5%.

b. All about the dividend

When it comes to dividends, my focus is on sustainable growth. I avoid companies that already have too high a payout ratio, or which barely increases the dividend. Interesting ratios for this are:

- Current dividend yield

- Dividend continuity

- Dividend growth

- Payout ratio

Linde:

- Current dividend yield: 1.30%

- Dividend continuity: 30 years

- Dividend growth: (5 years: 8.27%); (10 years: 7.84%)

- Payout ratio: approx. 60%

Airproducts:

- Current dividend yield: 2.2%

- Dividend continuity: 35 years

- Dividend growth: (5 years: 11%); (10 years: 9.5%)

- Payout ratio: approx. 60%

Shin-Etsu:

- Current dividend yield: 2.13%

- Dividend continuity: 25 years

- Dividend growth: (5 years: 10%); (10 years: 9%)

- Payout ratio: approx. 55

c. Low debt

In order for a company to be flexible even in high-interest phases, it should have low debt. I personally equate a high equity ratio with security.

Equity ratio:

Linde: 50.25%

Airproducts: 48.34

Shin-Etsu: 82.4%

3. outlook

I expect my investment to grow steadily in the future and to pay me a nice dividend. Admittedly, none of the companies offers a high dividend yield, and to be honest, I don't have a clear favorite among the three stocks. Linde and Airproducts are the bigger companies, but they have already had their big growth spurts. Shin-Etsu is a small but interesting company, but can it really compete with the big top dogs. According to the current market distribution, Airproducts and Linde are ahead - Linde even a bit more. However, Linde has already done very very well, and has almost three times the market capitalization of Air Products. I will decide in the coming weeks whether to bet on Linde or Air Products, and then open a position for my dividend portfolio.

I will publish the purchase again in GQ.

Final question: Which stock would you buy?

By the way, the outline of this post is inspired by the post of @RealMichaelScott (How to analyze a dividend stock). And on the topic of hydrogen I was inspired by the post of @Hannes_SK (Bye-Bye $PLUG (-3,03%) )

Sources:

[1]: https://de.marketscreener.com/kurs/aktie/LINDE-PLC-46923083/unternehmen/

[2]: Linde Erfahrungen: 711 Bewertungen von Mitarbeitern | kununu

[3]: Industriegase: Marktanteile größter Hersteller weltweit 2018 | Statista

[4]: Industriegase: Hersteller, Produktion und Anwendungen - Gasido.de

[5]: TraderFoxx; marketscreener; finanzen.net

#wasserstoff
#linde
#zukunft
#stockanalysis
#etfs
#aktien
#dividenden
#dividendencheck
#dividendenaktie
#geldanlage

How Penguins Revolutionized Modern Agriculture.

Hello, dear community,

Thank you so much for the great feedback on my last post. I hope your oven held up well during the practical tests.

For those of you who want to explore new horizons with your oven, here’s the link to the post I mentioned:

https://getqu.in/2A360BDV8GYN/n12zGfGeeF/

Just a thought-provoking prompt, since I’ll be running out of topics myself in a few weeks.

What topics in the fields of industry, energy, or chemistry do you, as investors, tend to question most often?

Here’s a topic close to my heart: “ammonia.” I hope you enjoy it.

Why Ammonia Is the Better Alternative to “Green” Hydrogen.

1. Significance and Background:

Ammonia is one of the most widely produced chemicals in the world. Researchers Fritz Haber and Carl Bosch called their process “bread from air”—a process that continues to shape the world today: ammonia synthesis.

Amid the competition for fertilizers during the Industrial Revolution, it was ultimately the rivalry between the major European powers that led the “land of poets and thinkers” to spark a revolution.

Based on research by biologist Justus von Liebig, nitrogen-containing fertilizers experienced an incredible surge in demand. Today, this can be compared more to the semiconductor industry.

Natural deposits of such fertilizers were limited. The potential here lay in Chilean saltpeter and guano (a mixture of seabird droppings, such as those from penguins, on limestone).

So while today we tend to seek dependencies, just under 100 years ago the goal was to limit them.

Ostwald achieved the first steps and successes in synthetic fertilizers with his Ostwald process. Today, however, this is used primarily for the production of nitric acid.

Birkeland, a Norwegian, developed a process—with the support of industrialist Sam Eyde—for producing nitric acid using an electric arc. This process, however, was drastically inefficient.

Let’s now turn to the main topic:

The Germans’ drive toward self-sufficiency remained unbroken. The chemists Fritz Haber and Carl Bosch therefore developed an industrial-scale synthesis based on nitrogen—which makes up nearly 80% of the air—and hydrogen. BASF showed great economic interest in this $BAS (-0,47%) . This led not only to a collaboration. In 1913, the first large-scale plant for the production of ammonia was built in Ludwigshafen, with a capacity of 30 metric tons per day—an enormous figure at the time.

Due to World War I and the resulting demand for explosives, additional plants were built in Bitterfeld and Leuna. Incidentally, this construction still forms the foundation for the significant chemical industry in Saxony-Anhalt today.

2. “Bread from Air”—the process in color.

Conventional production (gray):

To produce ammonia (NH₃), you need nitrogen (N₂) and hydrogen (H₂). Nitrogen can be easily obtained by feeding in air. Hydrogen was originally produced through chlor-alkali electrolysis. Today, however, hydrogen is primarily produced from natural gas via steam reforming.

After a relatively simple process, the end result is a truly repulsive, pungent-smelling liquid.

“Green” production:

The “green” production of ammonia differs only slightly from the conventional method.

Since nitrogen is already extracted from the air and thus does not generate greenhouse gases, CO2 savings are only possible during the production of hydrogen (H2).

In this process, hydrogen must be fed directly from water via electrolysis. At least, that would be the most efficient method, since no further phase change of hydrogen needs to be taken into account.

Thus, the process differs only in the production of the raw material “hydrogen.” The rest of the synthesis is also carried out using the Haber-Bosch process.

3. Uses – Why is ammonia actually so important for household use?

Ammonia is an important chemical raw material for virtually all branches of industry. Even in household use, we find it, for example, in:

- our refrigerator (refrigerant)

- our clothing (dye)

- diesel vehicles for exhaust treatment (AdBlue as a urea solution)

- proteins in the body and in the urea cycle as a breakdown product of the body’s own “overdose”

4. What does this mean in terms of potential beneficiaries for an investment?

To answer that, we must, of course, ask ourselves the questions behind the how, what, and why. Broadly speaking, ammonia can now be classified as part of the energy storage sector, though it receives significantly less attention in this regard than hydrogen.

The world’s largest publicly traded manufacturers are Yara $YAR (-1,87%) and CF Industries $CF (-2,63%) , although Yara, which also produces its own product, is more closely associated with the chemical trading sector, such as Brenntag $BNR (-1,16%) . As a result, the company is better positioned to weather crises during recessions. Chemical distributors can dispense containers of any size and purchase large batches, thereby retaining the difference as a margin. This tends to mean that, in times of economic uncertainty, customers are more willing to buy smaller containers to reduce inventory in the event of a production shutdown due to lack of demand.

CF Industries, on the other hand, is a “true” producer and has been aiming to produce “green” ammonia since this year.

With regard to advanced processes, the trend is now such that, due to improved efficiency, air is no longer injected—only pure nitrogen. Alongside this, of course, is hydrogen. Manufacturers usually possess the necessary process expertise themselves, so dependence on hydrogen suppliers can essentially be ruled out. One exception here is Linde’s engineering division $LIN . They possess expertise in entire hydrogen and ammonia plants. Incidentally, this would also be another reason to avoid the “small” hype stocks, such as Nel $NEL (+0%) or Plug $PLUG (-3,03%) in the hydrogen sector, and why these are unlikely to gain traction. After all, ammonia would be a massive customer for this industry. Nevertheless, ammonia producers are absurdly undervalued on the stock market—with average P/E ratios of 5. In contrast, some stocks in the largest hydrogen ETF $HTWO (+1,54%) are valued at >20—if they can even post profits at all.

Here’s an example:

CF-Industries is valued at around €14 billion. Plug Power is still valued at just under €7 billion—that’s half as much. While Plug has been burning through cash for years and doesn’t even generate revenue in the billions, CF is extremely profitable.

Both operate primarily in the “clean” energy sector. Nevertheless, CF is expected to see a decline in business in the coming years. This is inexplicable and illogical, and it certainly won’t happen.

5. So where is the growth potential?

This is truly extremely difficult to assess in this context, as the market is largely saturated and divided.

In general, however, one should indeed highlight BASF. Although the closure of ammonia production at the Ludwigshafen site is attributable to high production costs in Europe, the company largely retains the entire value chain of ammonia-based products in-house.

In the following, I would like to take a closer look at a few ammonia-based products that, in my opinion, have high growth potential. Given the growth potential of these products, manufacturers’ ammonia production should remain stable in the future and, of course, continue to gain in importance.

Urea:

Contrary to popular belief, urea is not merely ammonia or a solution of it. It is a distinct chemical compound and a derivative of ammonia.

With a market share of 46%, urea is the preeminent nitrogen-containing fertilizer. This trend is naturally set to continue as the global population keeps growing. Furthermore, many of the raw materials of the future are plant-based. This naturally means there is considerable growth potential here as well, along with a secure, crisis-resistant market. People will always eat!

3 representative examples: Yara $YAR (-1,87%) , CF Industries $CF (-2,63%) , Fertiglobe $FERTIGLB

Nitric acid:

Nitric acid is arguably the best-known nitrogen-containing acid. However, it is extremely dangerous in high concentrations, as it releases nitrous gases that are toxic and corrosive. It is used as a raw material for explosives such as TNT or nitroglycerin and is therefore essential for the mining sector. It is also found Yara is involved here as well. And no, this is not meant to be an advertisement. However, they control the vast majority of ammonia and nitrous production themselves and greatly value lucrative business opportunities.

Other major players in this sector include SKW Piesteritz GmbH and Staub & Co., as well as many other medium-sized companies.

Aniline:

Although aniline is now produced using ammonia only in the final stage of modern processes, it remains a steady market with growth potential. Earlier processes involved a complete reaction chain using ammonia. Aniline is a raw material for the production of dyes, medications, and synthetic rubber, as well as fibers—commonly known as synthetic fibers. As a substance, aniline also gave its name to the largest chemical company, BASF $BAS (-0,47%) , which derives from the original name of the Badische Anilin- and Soda-Ffactory .

In addition, however, DuPont $DD , Shin-Etsu $4063 (+5,17%) and Eastman $EMN (+0,44%) also offer many aniline-based products.

6. Ammonia as the Fuel of the Future?:

The purpose of my posts is, of course, to discuss energy sources of the future while focusing on diversification.

A Solution as an Alternative Fuel:

However, since ammonia consists of 75% hydrogen and 25% nitrogen, it can easily be split again using a so-called ammonia cracker. This means that hydrogen can, for example, be harnessed for energy in a fuel cell and, on balance, has an efficiency many times higher than that of ammonia. Nevertheless, it still lags far behind battery-powered vehicles.

Nevertheless, even here, well-known companies—particularly in the heavy-duty transportation sector—have emerged that are considering ammonia as a solution for the future.

The Deutsche Bahn wants to convert some of its freight trains to ammonia in order to minimize its diesel fleet.

The VW subsidiary $VOW (-1,14%) , MAN, is working on ammonia-based marine engines.

John Deere $DE (-0,08%) is also working on such engines for medium-duty tractors.

7. Ammonia as an energy storage medium—what are its advantages?

The main point here is that while hydrogen is needed to produce ammonia, it would have to be liquefied for transport—a process that consumes a lot of energy.

A quick recap: To do this, hydrogen must be cooled to approximately -250 degrees Celsius and compressed to 700 bar.

Ammonia, on the other hand, can be liquefied at 20 degrees Celsius—that is, room temperature—and at approximately 8 bar.

The energy required is therefore dramatically lower. Furthermore, ammonia’s energy density (~3.3 kWh/l) is higher because hydrogen (~2.2 kWh/l in liquid form) is chemically bound as an energy carrier, thereby reducing the volume of the hydrogen.

The relevant parameters are taken from the “Formula Collection” published by Duden.

In addition to the advantage I described above—that the compression energy required for ammonia is significantly lower than that for hydrogen—ammonia can also be easily stored chemically and handled much more advantageously. For example, ammonia can be converted into a salt, making it very easy to store and transport as a solid. At approximately 60 degrees Celsius, these salts decompose and release ammonia again.

But even without conversion, ammonia is already usable today as a gas, since the natural gas network infrastructure is designed to handle it. It can be transported by ship, via pipeline, or even in standard gas cylinders or cartridges.

This is because the structure of ammonia is coarser and larger than that of hydrogen.

8. What is the general disadvantage of ammonia?

The biggest disadvantages are the acute health and environmental hazards posed by the substance. Leaks would certainly cause lasting environmental damage to animals, nature, and humans.

It contains only a quarter of the energy of gasoline and only half that of diesel. Consequently, twice the amount would be needed compared to fossil fuels.

Incomplete combustion—which is quite common in engines—produces “nitrous oxide,” a narcotic and potent greenhouse gas. Engines must therefore burn fuel extremely efficiently and thoroughly.

Postscript:

I hope you enjoyed this post.

The next post will cover the chemical processing of lithium. The carbon footprint is an interesting aspect here, but the focus will be on how the stock market completely misjudges the value chains and how valuations distort the picture of the real economy.

Opinion on Shin-Etsu as a long-term investment? In my opinion, great potential for growth in the next 10 years.