ASML’s Chip Technology Move Threatens Besi Shares, BofA Says

BE Semiconductor Industries NV’s share price doesn’t reflect the threat from fellow Dutch company ASML Holding NV in terms of an advanced chip packaging technique, Bank of America analysts said.

That could magnify a recent tough run for Besi’s shares, which were the worst performers in the benchmark Stoxx 600 in the third quarter. The stock fell by as much as 6.4% Tuesday.

Besi is at the forefront of hybrid bonding, an emerging process to connect two chip surfaces directly with one another, eliminating metal bumps in between and resulting in better thermal efficiency. Bernstein analysts forecast three out of four hybrid bonders shipped in 2028 could come from the company.

But that advantage could face tougher competition, with ASML having publicly stated intentions to enter the market, analysts led by Didier Scemama wrote in a note. They cited this uncertainty among other factors behind their downgrade of Besi to neutral from buy, while slashing their price target by nearly half.

“The threat that a company like ASML could enter Besi’s key growth market, as well as the risk that Besi may need to invest more heavily in R&D, is not reflected in the stock and could remain an overhang” until there’s more clarity on ASML’s plans, the analysts wrote.

Spokespeople for Besi and ASML did not immediately respond to a request for comment.

Investor worries that memory chipmakers may delay hybrid bonding adoption were among the factors that saw Besi’s stock fall by roughly a third in the third quarter. The shares are still up 45% this year.

Hybrid bonding is crucial to Besi’s investment case. In an optimistic scenario, it expects to ship more than 2,000 tools by 2030. That compares to cumulative orders of above 150 at the end of 2025, according to its latest annual report.

ASML shipped its first advanced packaging product last year. During an earnings conference call in April, Chief Executive Officer Christophe Fouquet said the company continues to “look at the opportunity to support our customers” in hybrid bonding.

One issue slowing down the adoption of hybrid bonding is low production yields, with manufacturers struggling to produce enough working chips consistently, according to Bank of America. Higher accuracy levels are required to stack multiple logic or memory chips together, creating an opportunity for ASML because of its know-how in high-precision and high-speed lithography.

That creates uncertainty for Besi and could impact its valuations, the analysts said — even though they aren’t assuming that ASML would capture a significant market share.