Semiconductor equipment

A chip is made by repeating the same steps many times on a wafer: laying down thin films (deposition), drawing patterns with light (lithography), and cutting away what is not needed (etching). There is also inspection equipment that checks for flaws in between. Each step needs its own dedicated machine.

For each kind of machine, only a few companies make it well. ASML of the Netherlands, Applied Materials and Lam Research of the United States, and Tokyo Electron of Japan are the best-known. Without good equipment you cannot make advanced chips, so equipment is sometimes a target of export controls between countries.

A woodshop has a saw, a plane and sandpaper as separate tools, and a chip factory has a different machine for each step. Without the saw, no matter how good the wood is, you cannot make furniture.

When a new chip factory is built, equipment companies get the orders first. So the orders an equipment company receives are read as an early signal of where the chip business is heading.