Read or watch anything about the semiconductor industry and the same names come up over and over again. There are chip manufacturers: Taiwan Semiconductor Corporation, Samsung Electronics or Intel, companies that make the cutting-edge chips that power the devices we use every day. There are also well-known chip developers such as Nvidia, AMD and Arm. Perhaps if you dive a little deeper, you might come across ASML, a Dutch company that makes the extreme ultraviolet lithography machines that make these advanced chips.
But the semiconductor industry is much broader. There is a whole network of companies that play an important role in enabling cutting-edge and sophisticated chipmakers to produce the tiny pieces of silicon that go into our phones, refrigerators and washing machines. There are companies that supply gases and materials, produce tools for making chips and the parts that go into those tools.
And then there’s Lasertec: a little-known company that makes inspection systems that check chip designs made using EUV.
Lasertic is one of 30 companies included in the Asia Future 30. Fortune The list, compiled in collaboration with BCG, highlights the region’s companies best positioned for future growth. (You can access the full list here and the Future 50 list, which features 50 companies from around the world, here).
Lasertec, located in Yokohama, Japan, was founded in 1960 and was then known as ITV Tokyo Laboratory. The company began by designing and developing X-ray cameras for medical applications and expanded to provide inspection systems for the semiconductor industry in the mid-1970s. In the mid-80s the company changed its name to Lasertec.
But 2017 was the year that set Lasertec apart from its competitors, when the Japanese firm developed the first inspection system for EUV.
EUV machines – ASML only –expenses at least $200 million each, with more advanced versions costing above 300 million dollars. But for customers like TSMC, the price is worth it: It’s the only way to produce cutting-edge chips at scale.
But chip manufacturers must verify and certify that chips made by EUV are fit for use. This is where Lastertec’s inspection tools come to the rescue.
“Lasertec has a proven track record in EUV inspection systems and has partnerships with leading foundries such as TSMC,” says Lucy Chen, co-founder of JL Advisory Group, a Taiwan-based semiconductor research firm. She adds that in her experience, Lasertec systems are better than the competition.
Lasertec has a near-monopoly on control systems for EUV-based operations, which has been good news for the stock amid the chip boom. Lasertec’s share price has risen more than 1,500% over the past five years, and the company has been part of the top primary market of the Tokyo Stock Exchange since April 2022.
And despite some weakness in the semiconductor sector over the past few years, Lasertec’s sales and profits have still grown significantly. The company reported net sales of 95 billion yen ($628 million) for the six months ended December 31, 2023, up 72.4% year-on-year, and net profit of 22.2 billion yen ( 147 million US dollars), an increase of 63.4%. increase year on year.
In February statementIn its forecast for a market recovery in 2024, the company noted “robust” investments in artificial intelligence and “signs of a recovery in consumer demand.”
The chip supply chain, thanks to the technical expertise involved, is filled with near-monopolies: Nvidia for AI chips, TSMC for advanced chip manufacturing, and ASML for EUV. But beneath the big names that dominate the globalized and intertwined chip sector are many smaller companies that provide sophisticated technical services that competitors find difficult to replicate.
And as governments in the US, Europe and beyond invest more in advanced chip manufacturing, it could position suppliers like Lasertec for future success.
Future of Asia 30, created through a partnership between Fortune and BCG, it highlights 30 companies in Asia that are best positioned for future growth. The list can be found here.
Fortune is hosting the first Fortune Innovation Forum in Hong Kong on March 27-28. Experts, investors and executives of the world’s largest companies will come together to discuss “New Strategies for Growth” or how companies can best seize opportunities in a rapidly changing world.