All of the world's leading semiconductor foundries buy their lithography equipment from ASML. A new Twinscan NXE 3400B EUV lithography machine costs $120,000,000. TSMC's leadership has a vision of how to grow their business and make it profitable. They have invested billions in the past several years to develop and commercialize the new technology and they're reaping the benefits. They now own half of the EUV lithography systems that have been delivered and they are producing 60% of the world's EUV imaged wafers.
Intel, meanwhile, has recently announced another $2,400,000,000 of stock buybacks to temporarily prop up their sagging stock price. The cash spent on this buyback could have purchased 20 new EUV lithography systems. Instead, Intel proceeds to bring out another CPU "generation" using ye olde DUV at 14 nm.
We've got $2,400,000,000 in cash sitting here. Should we...
1) Buy a complementary business to grow our company, thereby increasing profit now and in future years?
2) Upgrade our manufacturing capability to increase sales volumes and revenue, thereby increasing profit now and in future years?
3) Upgrade our infrastructure to make make us more efficient and reduce costs, thereby increasing profit now and in future years?
4) Sit on the cash for now, maintaining financial security and flexibility until a good opportunity comes along in the future?
5) Buy back stock to make the company poorer and smaller, but achieve short-term increases in share prices to make our fat stock options more valuable?
This shows the difference between company leadership that has a vision and believes in their business and leadership that's just interested in the short-term appearance of success.
· R5-3600X, Liquid Freezer II 280, RoG Strix X570-E, 64GiB PC4-28800, RTX3080, 2TB SX8200Pro +2TB MX500 +NAS, Define 7 Compact, Focus PX-850, S3220DGF +32UD99, FC900R OE, DeathAdder Chroma