Why ASML is worth a multiple of Philips today

ZBetween the industrial halls made of yellow brick and glass, two small pillars sprout from the ground: a technical-looking drawing rests on one, and color filters are attached in front of it on the other: one blue, one red. The view through the blue window shows men working on a machine, semiconductor structures, the number 1984 – and a reference to Moore’s law of rapidly increasing microprocessor performance. Seen through the red glass, the year 2019 appears, along with another machine – a more modern one – and the logo of the chip machine manufacturer ASML.

In that year 2019, the light artist Ivo Schoofs set up the small monument: in a small inner garden on Strijp-T, a former industrial site of the Philips technology group in Eindhoven. Two or three dozen visitors with a sense of industrial history came to the unveiling to celebrate 35 years of ASML at the time. Here ASML people tinkered at the very first location, “in a leaky shed,” as the explanatory board puts it. In what was then a joint venture between Philips and ASMI (Advanced Semiconductor Materials International), they developed lithography systems, hence the “L”. Years later, ASMI withdrew because the initial investment seemed too high in relation to the chances of profit. Philips, in turn, announced a major austerity program, ASML was on the brink. Fortunately for the company, a Philips board member was particularly well disposed and persuaded the colleagues to inject another cash. Finally, in 1995, ASML went to the stock exchange.