Sometimes investing in the companies that supply the tools necessary to make a product is a better bet than investing in the company making the product. For the chip world, ASML Holdings (NASDAQ: ASML) is the only (more on that in a bit) company that provides the machines necessary to make chips with the most transistors possible.

However, a recent patent application from Chinese tech giant Huawei threatens ASML's monopoly. Is this a potential sell signal? Or is ASML still an investible company? Let's find out.

ASML's extreme ultraviolet (EUV) machines allow users to etch the world's smallest transistors on a chip. If you've heard of a 7nm (nanometer), 5nm, or 3nm chip, it was made using ASML's machines. ASML has very few customers, with only companies like Samsung, Taiwan Semiconductor, and Intel buying its products.

Continue reading

Source Fool.com