Source: Bloomberg (paywall)
ASML's 64% year-to-date gain masks a structural shift in semiconductor manufacturing economics: the industry is redirecting capital toward advanced packaging, chiplet assembly, and process integration rather than pushing lithography boundaries further. Process node improvements now deliver diminishing returns relative to their cost. Competitive advantage increasingly comes from how chips are packaged and integrated rather than how small transistors can be etched. This threatens ASML's dominant position as the exclusive supplier of cutting-edge lithography tools.