[Chip Talk] The Man Who Moves the Semiconductor Market... Words from the 'Super Eul' CEO

ASML CEO Chris Port Fuke Appointed Last April
Semiconductor Winter Theory Weighs on Stock, Plunges Sharply
Unfazed by US-China Tensions, Expresses Views Boldly
"For Now, Asia, Not the US, Is the Main Semiconductor Production Hub"

"The powerful development and growth of artificial intelligence (AI) continue, but other sectors are taking longer to recover. The recovery is slower than expected. This phenomenon is expected to persist into next year."

A single statement made by Christoph Pueke, CEO of ASML, the world's number one semiconductor equipment company and the sole manufacturer of extreme ultraviolet (EUV) lithography equipment known as the 'super Eul (乙),' shook the global semiconductor market. As the head of ASML, regarded as the 'industry barometer,' his remarks lent weight to the so-called semiconductor winter theory, which describes a market freeze. ASML's stock price plummeted more than 16% in a single day on the 16th (local time), the day of his statement. The following day, the stock fell an additional 6%, extending the shockwave. Semiconductor-related stocks such as Nvidia and TSMC also wavered. It was truly an 'ASML-triggered shock.'

Christoph Pueke, CEO of ASML [Photo by Reuters]

CEO Pueke took the helm of ASML in April this year following the retirement of former CEO Peter Wennink. Although only six months into his role as CEO, he is an industry expert with nearly 30 years of experience in the semiconductor sector. He began his career in 1997 at Applied Materials, one of the world's top three semiconductor equipment companies, and joined ASML in 2008, serving as Vice President in charge of EUV and Chief Business Officer (CBO). As ASML's equipment plays a critical role in AI semiconductor production, Time magazine named him one of the 100 most influential people in AI this year.

CEO Pueke's forecast of a sluggish market next year stems from ASML's earnings outlook. One day before his remarks, ASML released its Q3 earnings report and lowered its revenue forecast for next year from the previous 30 billion to 40 billion euros (approximately 44.75 trillion to 59.7 trillion KRW) to 30 billion to 35 billion euros. The Q3 equipment order volume was only 2.6 billion euros, about half of market expectations. Considering the semiconductor industry's tendency to cut equipment investments when a downturn is anticipated, the semiconductor winter theory naturally gained traction.

Especially, ASML, based in the Netherlands, is the world's only company producing EUV, which is essential for manufacturing cutting-edge semiconductors. Global semiconductor companies such as Samsung Electronics and TSMC have competed to secure equipment worth around 300 billion KRW per unit, making ASML the 'super Eul (乙)' of the semiconductor industry.

Given its significant influence, ASML faces pressure from countries vying for semiconductor supremacy, including the United States and China. Geopolitical factors have become highly influential in the semiconductor industry since the pandemic, placing ASML's CEO in a position where he must balance between major countries and seek appropriate countermeasures. In a June interview with the Wall Street Journal (WSJ), Pueke said, "For years, the company did not have to worry about political restrictions in its operations. But suddenly, these factors have become one of the most important topics worldwide."

Despite the changing situation, he does not adopt a cautious stance but actively appears in the media to openly share his views on the semiconductor market and policies issued by major countries. At an event held by Bloomberg in London on the 22nd, CEO Pueke predicted, "Given the geopolitical situation, it is clear that the United States will put more pressure on its allies to prevent semiconductor technology sales to China." Over the past three years, the U.S. has pressured the Dutch government to prevent ASML from exporting equipment to China. Pueke emphasized, "The question is what the right direction is for the Netherlands and what is right for Europe."

State-of-the-art semiconductor manufacturing equipment by ASML, the High-NA Extreme Ultraviolet (EUV) lithography system
[Image source=Reuters Yonhap News]

China is ASML's largest market. Nearly half of ASML's total Q3 revenue this year (2.79 billion euros) came from China. Regarding China's semiconductor technology, CEO Pueke analyzed, "In advanced fields, they are about 10 to 15 years behind." This is because the U.S. has blocked China's semiconductor technology development, leading China to invest heavily in legacy (older) processes instead of advanced technology. He believes that various restrictions imposed by the U.S. have been effective, slowing China's semiconductor technology development. This is why he described the semiconductors produced by China as "completely different from AI semiconductors." The U.S.-China conflict over semiconductor supremacy acts as an uncertainty factor for ASML.

However, CEO Pueke does not believe that the large-scale subsidies introduced by the U.S. and Europe for global semiconductor companies will lead to victory in the supremacy competition. In a recent interview with Nikkei Asia, he said, "The Asia region, including Taiwan, will remain a major semiconductor production hub for the coming years," adding, "If the U.S. and Europe want to win the semiconductor supremacy war, they need to improve the semiconductor manufacturing economic model." He explained that simply providing subsidies and tax benefits will only have temporary effects and that the high costs involved in semiconductor production must be addressed.

Considering ASML's position as the third-largest company by market capitalization in Europe, CEO Pueke frequently makes statements necessary for the European industry. Recently, when the Dutch government introduced anti-immigration policies, he pointed out that European countries should not restrict immigrant inflows if they want to maintain competitiveness in key industries. He said, "We have built a company with employees from over 100 nationalities," emphasizing, "Bringing in talent from anywhere is an absolute condition for success and must continue." He added, "To compete with countries like China and the U.S., access to capital, manpower, and energy is necessary, as well as places to build factories." Regarding speculation that ASML might relocate its headquarters overseas in opposition to its country's anti-immigration policies, he firmly stated, "We are not considering that at all."