[Stock Analysis] Canon (7751, CAJPY): Can This Fallen Tech-Titan Challenge ASML?

Canon's shift from camera giant to semiconductor hopeful: A deep dive into their move towards Nanoimprint Lithography (NIL) and what it means for their future.

Summary

• Canon, a global titan with over eight decades of influence, has navigated the peaks of industry leadership and valleys of strategic missteps.

• Their earlier decision to lean into X-ray lithography over EUV possibly marked their decline in the tech forefront.

• Exploring the EUV machine manufacturing space, now helmed by ASML, Canon seeks a renaissance.

• Canon's diverse portfolio and legacy of innovation indicate its potential for resurgence and continued market impact.

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Table of Content

1. Introduction

2. Company Segments & Moats

3. Valuation

4. Future Outlook & Risks

5. KonichiValue Score

6. Conclusion

1. Introduction

Canon, once a beacon of technological prowess, was established in Tokyo in 1937. The company rose to global prominence in the 1970s and 1980s, especially with its cameras, setting industry standards in imaging.

By the 1990s and early 2000s, Canon had diversified, delving into photocopiers, printers, and medical equipment, further consolidating its position. Most notably, by the 1990s, Canon and Nikon held a combined 80% market share of the entire semiconductor lithography space.

However, as the 21st century progressed, Canon faced challenges. Strategic missteps, like prioritizing X-ray lithography over the revolutionary EUV technology, destroying its market share in the segmet. Additionally, competition in its core business segments, like imaging and printing, grew fierce.

Canon's once-dominant positions in these areas began to wane, facing stiff competition from emerging market players and changing consumer behavior. But contrary to popular belief, Canon never fades away and is still one of the world's largest companies in their segments.

With their vast experience and commitment to innovation, Canon stands at the precipice of a new era, potentially challenging ASML's stronghold in the EUV machine manufacturing sector.