ASML of the Netherlands, the world's only producer of EUV exposure equipment saw its net profit in the second quarter of 2020 double from a year ago. Its profits have been growing rapidly thanks to competition between Korea’s Samsung Electronics and Taiwan's TSMC in the micro-fabrication technology.

ASML announced on July 5 that it posted 3,326 million euros in sales and 751 million euros in net profit in the second quarter of 2020. Its sales grew 36 percent from 2,441 million euros in the previous quarter and its net profit 92 percent from 391 million euros. Compared to the same period of 2019, its sales and operating profit have swelled 30 percent and 57 percent, respectively.

Driving the company’s sales growth is EUV lithography equipment. As semiconductor micro-fabrication processes have recently advanced to the 5-nano (one-billionth of a meter) level, it is essential for foundry companies to secure EUV equipment worth 200 billion won per unit. It is impossible to upgrade the level of micro-fabrication processes below the 7-nano level with the current ArF exposure equipment. This has led major foundry companies such as GlobalFoundries to give up the EUV-based semiconductor market due to cost burdens.

Currently, only Samsung Electronics and TSMC are introducing EUV equipment to their foundry lines. ASML is receiving so many orders that it cannot meet demand from the two companies. In fact, ASML shipped nine pieces of EUV equipment in the second quarter of 2020 and received reservations for three pieces of EUV equipment. As Samsung Electronics is planning to expand the application of EUV lithography to production of memory semiconductors such as DRAMs, ASML is expected to steadily enjoy strong sales. SK Hynix is also considering introducing EUV lithography.

Semiconductor industry experts predicted that the competition between Samsung and TSMC will heat up further. Based on the introduction of ASML's EUV equipment, Samsung Electronics is narrowing its gap with TSMC. It took up an 18.8 percent share of the foundry market in the second quarter of 2020, up 2.9 percentage points from the previous quarter.

On the other hand, TSMC's market share in the second quarter of 2020 stood at 51.5 percent, down 2.6 percentage points from the previous quarter. Some experts predict that TSMC’s share will fall below 50 percent before long. Samsung Electronics is planning to start the operation of a 3-nano foundry process in 2022, and so is TSMC. This means that the race between the two will become much fiercer going forward.