"Monopolies, we're told, are bad things. With excessive market power, they can raise prices, reduce innovation, lower product quality, and offer less consumer choice. This is why they often draw antitrust scrutiny and ethical concerns. Yet some companies achieve dominance through sheer innovation, scale, and technological barriers that competitors simply can't breach. These natural leaders don't rely on underhanded tactics; instead, they build moats so wide that they become indispensable to their industries. Regulators may occasionally poke at them, but their core strengths endure, making them some of the best bets for long-term growth."
"ASML Holding is a Dutch dynamo that essentially controls the production of the world's most cutting-edge chips. ASML's extreme ultraviolet (EUV) lithography systems are the only viable tools for fabricating most processors at 7nm and smaller nodes, powering everything from smartphones to AI supercomputers. Without ASML's machines, industry titans like ( Taiwan Semiconductor ManufacturingIntelNASDAQ:INTC), and Samsung would likely grind to a halt, as no credible alternatives exist in this hyper-specialized field. This isn't just dominance - it's a stranglehold built on decades of R&D, intricate patents, and a supply chain that's nearly impossible to replicate."
Monopolies can raise prices, reduce innovation, lower product quality, and limit consumer choice, prompting antitrust scrutiny and ethical concerns. Some firms, however, achieve dominance through innovation, scale, and technological barriers that create wide, defensible moats. ASML dominates advanced lithography with near-exclusive control of EUV systems and over 90% share in advanced DUV tools, making modern chip fabrication dependent on its machines. Alphabet and Microsoft hold virtual monopolies in search/advertising and software/cloud platforms, respectively, benefiting from network effects and scale. Regulatory actions occur occasionally, but secular trends—AI, 5G, digital transformation, and semiconductor demand—support durable growth and portfolio potential.
Read at 24/7 Wall St.
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