ASML | An industry leader you've probably never heard of

Of the 1848-1855 California Gold Rush, Mark Twain said "During the gold rush its a good time to be in the pick and shovel business".

Twain's statement is only partly true as others such as Cornelius Vanderbilt probably did even better. Vanderbilt transported people to California. He innovated by using ships together with a short route through the isthmus of Nicaragua to get his customers from the American East Coast to the West Coast faster than his competitors managed to do. The competitors moved their customers overland across the continent.

The salient points here, though, are the following:

(1) In terms of the picks and shovels: The real opportunity is often not what it seems. While everyone was fighting for South African bricks-and-mortar shopping center locations (the equivalent of the 1848 Californian mining claims) for retail gold, the big opportunity turned out to be a great new 60-minute delivery shovel.

(2) In terms of Vanderbilt's innovative genius: While everyone was using the conventional and 'obvious' modes of transport, Vanderbilt innovated.

There's Gold in Them Thar Dutch Towns

In a previous post regarding the Netherlands, we focused on how this small country achieves its centuries-old high levels of innovation through approaches, culture, methodologies and ways of working.

Today we will focus on how they also deeply understand the difference between being the ones who dig for the gold versus being the ones that provide the very necessary picks and shovels.

The Dutch company ASML is probably a supreme example. At the time of writing this, their market capitalisation (at 360 billion euros) is much larger than the market cap of SAP (at 210 billion euros). SAP is used by most of the major SA retailers and by many other types of companies too. We have 'all' heard of SAP. Very few of us have heard of ASML.

Even so, this 'unknown' company, located in a relatively small town (Veldhoven) in the Netherlands, is one of the big corporate players (possibly even 'the' biggest) in terms of how the future of our planet will play out. And, yes, we don't think that the previous sentence amounts to a hyperbole.

What does ASML do?

They build the technology that builds computer chips. From Wikipedia: "the sole supplier in the world of extreme ultraviolet lithography (EUV) photolithography machines that are required to manufacture the most advanced chips". I.e. they sell shovels. And they also have a monopoly on selling shovels!