InSight

Meet Europe’s Tech Titan: The Giant Behind the Scenes

Financial Planning Dentist

Imagine a company so integral to our daily lives, its products are in virtually everything tech-related you use, yet its name might not ring any bells. We’re talking about a Dutch powerhouse, ASML Holdings, often hailed as “the most important tech company you’ve never heard of.” This stealthy giant’s market cap skyrocketed from $25 billion to an eye-watering $225 billion in just a decade, and at one point, it even brushed past $350 billion. Last year alone, it raked in almost $20 billion in net sales and pocketed over $6 billion in profits. Impressive, right?

The Wizardry of Chip Making

ASML sits at the heart of the tech world with its cutting-edge chip-making equipment. Its specialty? Lithography machines. These aren’t your ordinary machines; they’re the wizards behind the curtain, etching incredibly complex circuits onto silicon wafers with the precision of a fine artist. This magic is essential for creating the brains of today’s tech – from the smartphone in your pocket and the laptop on your desk to the cars on the road and much more.

Lighting Up the Tech World with EUV

The star of ASML’s show is its Extreme Ultraviolet (EUV) lithography systems. These marvels use laser-generated EUV light beams, honed by massive mirrors, to sketch ultra-fine circuits on silicon wafers. This breakthrough allows for faster, more potent microprocessors and memory chips, fueling everything from consumer gadgets to military tech.

The Intricate Dance of Chip Fabrication

Picture this: a lithography system beams light through a stencil, transferring patterns onto a photosensitive wafer. The wafer shifts slightly, and the process repeats, layering patterns to build an integrated circuit, chip by chip. It’s a delicate dance, with the simplest chips comprising around 40 layers, while the most complex boasts over 150.

The Linchpin for Leading Chipmakers

The giants of the chip world, like Intel, Samsung, and TSMC, rely on ASML’s wizardry to craft the most advanced chips out there. With over a third of its workforce dedicated to R&D, ASML has outpaced its competitors, securing over 90% of the lithography market. And in a world where the appetite for chips exceeds supply, ASML’s machines, particularly its EUV systems, are in hot demand.

Keeping Moore’s Law Alive

ASML isn’t just making machines; it’s pushing the frontier of Moore’s Law, which predicts the exponential growth of computing power. Thanks to ASML, chipmakers can cram billions of transistors onto a chip, keeping the law alive and kicking.

The Logistics of Delivering Innovation

Getting one of ASML’s EUV systems from factory to chip plant is no small feat. It involves three Boeing 747s, 40 containers, and 20 trucks to transport a machine that’s as big as a bus, contains 100,000 parts, weighs nearly 200 tonnes, and costs about $150 million. And a top-tier chip plant might need up to 18 of these behemoths, representing a significant investment for any chipmaker.

The Future Is Even Bigger

ASML isn’t resting on its laurels. The next generation, the “High NA” EUV machines, promises even greater capabilities at double the price tag of their predecessors. This advancement is not just about keeping up with technology; it’s about leading the charge into the future of computing.

So, the next time you swipe your phone, remember: there’s a good chance ASML played a part in making that moment happen. Hidden in plain sight, ASML is the silent titan powering our tech-driven world, one chip at a time.

More related articles:

boulder financial planning experts with 1031 tax mitigation experience
Articles
Kevin Taylor

1031 Fee Structure

Asset Based Fees Low High Fee $0.00 $500,000.00 $1,500 $500,000.01 $1,000,000.00 $2,000 $1,000,000.01 $3,000,000.00 $2,500 $3,000,000.01 and up $3,000 Additional Service Fees Event Fee Replacement Properties $350/per acquired Back-to-Back Closings $250 Rush Fee (inside 48 Hours) $500 Wire Fee $35 *Fees for 1031 services are assessed by InSight 1031, separate from the management fees from InSight, Corp., and assessed from the proceeds of the transaction.  Previous Next

Read More »
1031 Exchange Alternative
Articles
Peter Locke

An Alternative or Back-up for the 1031 Exchange

The Delaware Statutory Trust (DST) is a trust that is structured as a pass-through entity and can hold passive Real Estate. It can function as a 1031 Exchange Alternative. All of the debt is nonrecourse and the income, net of expenses, is distributed to the investor.  What are the advantages?   1031 Exchange compatibility Passive investment with no management responsibility Estate planning tool – pass DST on to your heirs, tax deferred Who benefits from them? Investors no longer wanting to manage real estate Retiring real estate investors Backup/ alternative option for 1031 exchanges Investors looking to diversify into properties typically unavailable to them A Delaware Statutory Trust is a legal entity used to arrange for the co-ownership of property. DST’s are a great vehicle when constructing real estate offerings as co-owners are entitled to profits earned from the property, like rent, without the management responsibilities. For many it can be a 1031 Exchange Alternative. So why do people use DST’s? Let’s say you have an investment property that you’ve held for a long time and because you’ve depreciated the property for a number of years your basis is very low and the property has grown considerably simultaneously. Well you’d have a large capital gain on your hands if you sell it. You could do a 1031 exchange (1031 Exchange)  but that means getting another investment property, following a number of rules, and doing it in a short amount of time. Although very doable, looking at a more passive strategy may benefit you.  If you want your capital to be invested from your home without losing a majority of it to capital gain taxes and are accustomed to cash flow from your rentals then deferring your gains and reinvesting your capital into like-kids real estate can be done through a 1031 exchange. You may also decide to hire a third party management company to take the day-to-day responsibilities away as well which although cuts into your income, saves you from the downside of being a landlord. If you’re the one being a landlord, want to expand your investment portfolio, and want cash flow then the DST is the best of both worlds alternative where you don’t have to choose between paying taxes now or being a landlord. With the DST, you get passive income, capital grows free of capital gains tax, you avoid being a landlord, and you get diversification. Let’s walk through how you’d do this. First, you’d make use of the 1031 exchange by swapping the proceeds from your real estate sale of your investment property for interest in a DST. By doing this, you become co-owners/investors in a diversified portfolio of properties and pass the management responsibilities on to the sponsor who acts as the trustee for the DST. This satisfies your IRS responsibility of finding a “like kind” property and enabling you to defer capital gains.  DSTs provide you limited liability protection, regular (at least quarterly but often monthly) cash flow income, high-quality assets, and 1031-compatibility. Since with any trust there is a trustee (takes legal title for purposes of management) and a beneficiary (takes equitable title). DSTs are pass through entities, so as a beneficiary, this structure entitles you to a fractional share of income, appreciation, and tax benefits from the properties.  This structure is key for 1031 eligibility as the acquiring property must be “like kind” to your sold real estate and even though you don’t hold legal title, for tax purposes, you’re treated as owning that property. Since the DST is a separate legal entity, beneficiaries have limited liability and therefore any debts incurred by the DST won’t put the investors personal assets in harm’s way. It also protects personal assets from the liabilities of other owners and the DST itself.  DSTs are the only statutory trusts to be explicitly recognized by the IRS as legal entities that can facilitate a 1031 exchange.  What are the risks of DST’s? Macroeconomic risks Economic downturn can mean lower returns and income Liquidity risks Most DST’s have an investment period of 7 to 15 years Although you get cash distributions your principal is off limits during this time Management risks A bad sponsor may pick overvalued properties when compared to peers  A low yield while the investor is still collecting fees for management and organizing the investment Do your due diligence to check the sponsors history, background, and how similar deals have done in the past to see if projected return rates were met and problems due to bad management didn’t occur High vacancy rates and unforeseen costs hurt cash flow Financing Risk DSTs are managed differently but if the trustee uses high loan to value offerings there is a higher risk of foreclosure Fully amortized loans need to be paid by the end of the loan agreement so that could affect your cash distributions Eligibility The DST needs to be structured to facilitate your 1031 Exchange Alternative In conclusion, DST’s when done properly, are a great way of getting away from being a landlord or paying a large sum of capital gains taxes while simultaneously giving you the passive income, limited liability, 1031 compatibility, and high quality asset diversification. However, just because it does all these things doesn’t make it a great investment. They require proper due diligence to review the sponsors reports, loan documents, appraisals, underwriting data, etc prior to investing.

Read More »

Can manufactured homes can be considered like-kind property for tax purposes under IRC Section 1031

Q: I was wondering if manufactured homes can be considered like-kind property for tax purposes under IRC Section 1031. A: It turns out that the classification of manufactured homes depends on whether they are classified as real property or personal property. If a manufactured home is permanently affixed to land that the homeowner owns, it can be classified as real property. Just like traditional site-built homes, these manufactured homes are tangible structures that are permanently attached to the land. They have an APN number assigned by the county tax assessor for identification and record keeping. If you receive an annual property tax bill from the county, it confirms that your home is considered real estate and can be used for a 1031 exchange. On the other hand, if a manufactured home is considered personal property, it means that it is often installed on a temporary foundation on leased land. In this case, the homeowner has the option to move the home to another location. This classification is similar to that of a vehicle, and the homeowner receives an annual registration renewal from the DMV. Since mobile homes classified as personal property are not considered real estate, they do not qualify for tax deferral treatment under IRC Section 1031. If you want to confirm whether your home is classified as real or personal property, it’s a good idea to reach out to a Title Insurance company. They can provide you with the necessary information about the classification of your property. Hope this helps you understand the distinction between manufactured homes classified as real property and personal property for tax purposes!

Read More »

Pin It on Pinterest