Builds the only machines that can print the tiny circuit patterns found in the world's most advanced computer chips.
At a glance
- Depends onUpstream position: supplies 4 industries, depends on 0
- ScaleMarket cap is in the top 5% of all stocks globally
Builds the only machines that can print the tiny circuit patterns found in the world's most advanced computer chips.
ASML builds the only machines that can pattern semiconductor features below 7 nanometers, by firing a TRUMPF laser at falling tin droplets to generate a plasma that produces 13.5-nanometer light, which Zeiss mirrors — polished to sub-angstrom smoothness by hand, over months — then collect and focus onto silicon wafers. Because no other supplier has qualified to that optical tolerance, and the testing required to do so cannot be shortened by spending more money, the number of scanners ASML can ship each year is ultimately capped by how many mirror sets Zeiss can finish. TSMC, Samsung, and Intel all depend on those scanners arriving on schedule, and once a chipmaker builds a cleanroom around these machines and tunes its circuit designs to how EUV patterning behaves, switching to a different tool would mean rebuilding the room and rewriting the design rules — a process that takes well over a year even before a single production wafer runs. The Dutch government's export licence adds a layer of risk that sits entirely outside ASML's control: it has already barred sales to Chinese customers, and any further restriction would shrink the pool of buyers without changing anything about the underlying technology.
How does this company make money?
Each EUV scanner sells for more than €200 million. The company also sells immersion lithography systems — an older but still widely used technology — for €40 to €80 million each. On top of those one-time sales, it earns steady income from spare parts, consumables, and maintenance contracts, which together make up about 25% of annual revenue.
What makes this company hard to replace?
Chip factory cleanrooms are built and plumbed specifically around the physical dimensions of these machines, so swapping in a different tool would require rebuilding the room. The libraries of design rules that chip engineers use to draw circuits are tuned to how EUV patterning behaves, so switching tools means rewriting those libraries too. And any new lithography machine brought into a high-volume factory must go through a qualification process that takes 12 to 18 months before a single production wafer can run through it.
What limits this company?
The machine can only expose about 185 wafers per hour, because the laser must fire at tin droplets in a very precise rhythm. Speeding up that rhythm destabilizes the plasma flash and risks destroying the Zeiss mirrors, so simply buying more powerful lasers does not help. That physical ceiling, set by the tin-plasma process itself, caps how many chips any customer can produce per machine.
What does this company depend on?
Zeiss supplies the multilayer-coated mirrors that collect and focus the EUV light. TRUMPF supplies the CO2 lasers that vaporize the tin droplets. Tin itself must be supplied for the plasma light generation to work. Precision suppliers provide the specialized vacuum chambers the process runs inside. And the Dutch government must issue export licences before any machine can be shipped — without that licence, the sale cannot happen.
Who depends on this company?
TSMC's 3nm and 2nm production lines would stop patterning their most critical layers without these machines. Samsung's foundry lines for advanced mobile processors would lose access to any manufacturing node below 5nm. Intel's chip roadmap beyond 10nm would face multi-year delays and would need to find entirely different ways to draw circuit patterns.
How does this company scale?
Once the engineering and software for a scanner generation is finished, that knowledge can be applied to each additional unit built. But the Zeiss mirror polishing cannot be sped up — it requires master craftsmen and months of iterative testing for every set of mirrors, and no amount of capital investment can automate or shorten that process. So as demand grows, the mirror supply remains the hard ceiling.
What external forces can significantly affect this company?
U.S. export control restrictions already bar sales of EUV machines to Chinese semiconductor manufacturers, shrinking the pool of potential customers. The Dutch government's own export licence requirement adds a second layer of political risk that sits outside the company's control. European Union rules on fluorine-based gases used inside the scanners could affect how the machines are operated. China's heavy domestic investment in chips also means a large share of global demand is concentrated in a market the company is increasingly locked out of.
Where is this company structurally vulnerable?
If the Dutch government expanded its existing export licence restrictions, or if Zeiss or TRUMPF were themselves hit with export controls, the supply of mirrors and lasers could be frozen. Because no other supplier is qualified to make either part at EUV tolerance, and qualifying one would take months or years, even a temporary ban could halt machine production entirely.
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