From MoneyWeek · · 2m
ASML's EUV Monopoly
Dutch tech giant ASML dominates semiconductor lithography with EUV machines costing hundreds of millions.
In brief
Dutch tech giant ASML dominates semiconductor lithography with EUV machines costing hundreds of millions. ASML's EUV lithography systems, priced at €180m-350m, are critical for advanced chip production and create a defensible competitive advantage. Originally reported by MoneyWeek.
ASML's EUV Systems
ASML is the only commercial supplier of EUV lithography systems, machines that print the most advanced computer chips.
“An extreme ultraviolet (EUV) lithography system is roughly the size of a double-decker bus, weighs roughly 180 tonnes and costs more than €180 million.”
2025 Financials
ASML recognized revenue from 48 EUV systems and generated €32.7 billion of sales overall in 2025.
“In 2025, ASML recognised revenue from 48 EUV systems and generated €32.7 billion of sales overall, including €8.2 billion from servicing and upgrading its installed base.”
Supplier Network
ASML coordinates a network of specialist suppliers including Carl Zeiss for mirrors and Trumpf for lasers.
“German company Carl Zeiss makes the mirrors at the heart of the optical system. Trumpf supplies the lasers used to generate the EUV light, while other specialists provide components ranging from wafer stages to sensors and software.”
Key Customers
ASML serves TSMC, Samsung, and Intel, companies that rely on its EUV technology for leading-edge chip production.
“Its customers include TSMC, Samsung and Intel, companies with the scale and expertise to develop much of their own technology.”
Humble Beginnings
ASML was established in 1984 as a joint venture between Philips and ASM International.
“ASML was established in 1984 as a joint venture between Philips and ASM International.”
Early Success
ASML won customers with the PAS 5500 system in the 1990s, leading to profitability and a 1995 IPO.
“The breakthrough came in the 1990s with the development of the PAS 5500. Its productivity and resolution helped ASML win the customers it needed to become profitable. The company went public in 1995, giving it access to the capital needed to expand its research and manufacturing operations.”
EUV Breakthrough
ASML and its customers spent years developing EUV technology, with Intel, Samsung, and TSMC funding R&D.
“ASML and its customers spent years developing the technology, with Intel, Samsung and TSMC helping to fund the effort.”
2012 Investment
In 2012, Intel committed €829 million of R&D funding and a 15% stake in ASML.
“Intel alone committed €829 million of R&D funding alongside an investment of up to 15% in ASML.”
Competitive Moat
ASML's competitive moat includes technology, expertise, and relationships that make rivals struggle to challenge.
“That combination forms ASML's competitive moat, the technology, expertise and relationships that make the business difficult for rivals to challenge.”
EUV Pricing
ASML sells low-NA EUV systems for €180 million and high-NA ones for over €350 million.
“The company now sells its low-NA EUV systems for roughly €180 million and high-NA ones for more than €350 million.”
Installed Base
ASML generates €8.2 billion annually from servicing and upgrading machines in customers' fabs.
“ASML continues to service its machines throughout their working lives, helping customers maintain performance and install upgrades. Its installed-base business therefore grows as the number of machines in operation increases, creating a source of revenue alongside new system sales.”
Why Rivals Can't Copy
ASML's system requires integration of thousands of precise components from a global supplier network.
“Roughly 80% of ASML's bill of materials is sourced from its global supplier network. A rival would have to recreate that network, integrate thousands of precise components and persuade the world's leading chipmakers to install an unproven machine in their most valuable factories.”
Customer Support
ASML has 10,000 global customer-support employees to maintain and upgrade machines.
“ASML has about 10,000 customer-support employees working around the world to keep its systems running.”
China Market
China accounted for 29.1% of ASML's 2025 sales, though much was mainstream equipment, not EUV.
“China accounted for 29.1% of ASML's sales in 2025, although much of this was mainstream semiconductor equipment rather than the EUV systems at the centre of its monopoly.”
Taiwan and South Korea
Taiwan and South Korea each accounted for 25.5% of ASML's 2025 sales, creating regional exposure.
“Taiwan accounted for 25.5% of ASML's 2025 sales and South Korea another 25%.”
Customer Timing Risk
ASML's revenue fluctuates with customer capital expenditure timing, as seen in 2023-2025.
“ASML recognised revenue from 327 new and refurbished lithography systems in 2025, compared with 418 in 2024 and 449 in 2023.”
Long-Term Threats
AI and chip design shifts could reduce reliance on ASML's lithography technology.
“The price of each technological advance is rising. High-NA EUV machines cost hundreds of millions of euros, while chipmakers can also improve computing performance through chiplets, advanced packaging and architectural changes.”
2026 Outlook
ASML raised full-year revenue guidance to €43 billion-€45 billion for 2026, up from €32.7 billion in 2025.
“ASML reported €9.3 billion of sales in the second quarter of 2026, with a 54% gross margin, and raised its full-year revenue guidance to €43 billion-€45 billion, up from €34 billion-€39 billion at the start of the year.”
Investment Case
ASML shares trade at 35x 2026 earnings, with growth potential but high price sensitivity.
“At roughly €1,700 a share, the stock trades on around 35 times consensus 2026 earnings and 25 times projected 2027 earnings.”
The takeaway
ASML's EUV lithography systems, priced at €180m-350m, are critical for advanced chip production and create a defensible competitive advantage.
