Investment Rating - The report does not explicitly provide an investment rating for the semiconductor industry or specific companies involved in EUV technology Core Insights - The US initially played a significant role in semiconductor technology development but has lost its competitive edge, particularly in EUV technology, to ASML and Asian manufacturers [1][2] - ASML Holding NV has established a monopoly on EUV machines, which are critical for advanced chip production, with a market capitalization exceeding $350 billion [2] - The transition to EUV technology was fraught with challenges, requiring substantial investment and collaboration among major chipmakers [5][8] - Intel's misjudgment regarding the viability of EUV technology has led to a significant decline in its market position compared to competitors like TSMC and Nvidia [12] Summary by Sections Industry Background - The semiconductor industry has evolved from using visible light to ultraviolet light for chipmaking, with a focus on achieving near-atomic scale transistors [3][4] - The development of EUV technology began in the 1980s, with significant investment from US national laboratories and private companies [4][5] Technological Challenges - EUV technology involves complex processes, including generating plasma from tin droplets and requires extremely smooth mirrors for effective operation [6][7] - Initial optimism about EUV's commercial viability proved misplaced, delaying its market introduction until 2018 [8] Competitive Landscape - TSMC has overtaken Intel in technological capabilities by successfully implementing EUV technology, while Intel struggled with alternative methods [9][10] - The geopolitical implications of EUV technology are significant, as it has enabled Chinese companies to access advanced chips, raising national security concerns for the US [10][11] Future Directions - Intel is now focusing on the next generation of EUV technology, High Numerical Aperture, to regain its competitive edge [12]

Investment Rating - The report does not explicitly provide an investment rating for the microelectronics industry. Core Insights - The microelectronics industry is critical for the U.S. economy and national security, with significant investments from the bipartisan CHIPS Act aimed at revitalizing domestic manufacturing and enhancing the R&D ecosystem [14][26]. - The strategy outlines four interconnected goals to strengthen the microelectronics sector over the next five years, focusing on research advancements, infrastructure support, workforce development, and innovation ecosystem creation [16][20]. Summary by Sections Introduction - The microelectronics revolution has transformed modern life, impacting various sectors such as communications, healthcare, and transportation, making it essential for U.S. economic and national security [21][23]. - The U.S. share of global semiconductor manufacturing has significantly declined, necessitating action to increase domestic capacity and workforce training [21][24]. Goals and Objectives - **Goal 1**: Enable and accelerate research advances for future generations of microelectronics, focusing on materials, circuit design, processing architectures, and manufacturing tools [16][22]. - **Goal 2**: Support and bridge microelectronics infrastructure from research to manufacturing, enhancing access to design tools and fabrication resources [17][22]. - **Goal 3**: Grow and sustain the technical workforce for the microelectronics ecosystem, emphasizing education and public engagement [18][22]. - **Goal 4**: Create a vibrant microelectronics innovation ecosystem to facilitate the transition of R&D to U.S. industry, fostering collaboration among stakeholders [19][22]. Microelectronics Innovation Ecosystem - The microelectronics innovation ecosystem is complex and capital-intensive, with limited access to leading-edge capabilities for researchers, which constrains innovation [34][35]. - The CHIPS Act investments aim to enhance access to advanced infrastructure and support workforce development [35][36]. Future Directions - The report emphasizes the need for a comprehensive approach to R&D across the full stack of microelectronics technology, addressing challenges in fabrication, testing, and integration [31][32]. - International collaboration and tech diplomacy are crucial for leveraging resources and ensuring supply chain security in the global semiconductor landscape [33][36].

US equity opportunities beyond the Magnificent Seven March 2024 Chris Galipeau Senior Market Strategist Key takeaways • High earnings expectations combined with a slowing economy may make the stock market prone to disappointments in 2024. Samir Sinha Senior Analyst • The “dot-com” period, which featured similar index concentration and falling interest rates, offers clues to trends this year. • We see attractive potential in areas that would allow investors to diversify their US equity portfolios beyond the ...