Talking Cereal & (Integrated) Chips

Tags: asml
10 Jan 2:20am
Posted by ZacksResearch
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In this feature, we cite ASML Holdings NV (ASML)

Recalling the Story of W.K. Kellogg

During the Great Depression, instead of cutting back, W.K. Kellogg doubled his advertising spending -- and Kellogg cereal sales increased. In response to the hard times created by the Depression, Mr. Kellogg reduced the hours of the three plant shifts and created a fourth shift, spreading the payroll among more workers.

Kellogg emerged as a market leader after the Depression was over, and it still enjoys that position today.

*Courtesy of the Kellogg's website: http://www.kelloggs100.com/history.html

This applies to Semiconductor companies perhaps more than many people realize. Firms must reinvest in technology to stay relevant.  Those who invest in technology will reap the rewards when the market does turn around. ASML (ASML) is one of those companies.

ASML has the leading position in the next-generation immersion lithography tools, which will lead to long-term growth. The firm is managing weakness in the markets by cutting SG&A [sales, general and administration] and R&D [research and development] expenses, yet not cutting R&D programs (e.g., trimming the fat).

The Immersion business continues to show significant strength, as the firm shipped 16 systems in the third quarter and has 27 Immersion systems in its backlog. ASML has shipped 46 Immersion systems year to date and now has more than 110 Immersion systems delivered to over 20 individual customers worldwide. Certainly a leadership position.

Read the full analyst report on ASML




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