Nvidia’s ascent to the pinnacle of global market capitalization, fueled by its cutting-edge chips driving the artificial intelligence revolution, is inextricably linked to the quiet prowess of ASML. The Dutch semiconductor equipment giant stands as a testament to European technological leadership, providing the indispensable machinery for the intricate printing of microscopic patterns onto silicon wafers – the very foundation of modern semiconductors.
ASML holds a near-monopolistic grip on the lithography market, commanding approximately 90% of the broader segment. However, its true strategic advantage lies in its exclusive production of Extreme Ultraviolet (EUV) lithography machines. These sophisticated systems are the sole enablers for manufacturing the most advanced semiconductor nodes. Didier Scemama, an analyst at Bank of America, recently highlighted ASML’s dominant position, predicting its unassailable lead in next-generation EUV lithography. “ASML has industrialized next-gen EUV lithography technology, which we believe will underpin many of the disruptive trends of this decade,” he noted. This assessment follows ASML’s latest earnings report, which revealed fourth-quarter 2025 bookings that significantly surpassed analyst expectations, more than doubling projections.
## ASML: The linchpin of advanced chip manufacturing
The critical role of ASML’s lithography machines in chip production cannot be overstated. Javier Correonero, an equity analyst at Morningstar, emphasizes that lithography is “the building block of any chip,” with ASML’s technology underpinning the production of an estimated 99% of semiconductors. The current AI boom, however, is particularly reliant on ASML’s EUV capabilities.
ASML offers two primary EUV lithography systems: the low numerical aperture (low-NA) EUV, essential for producing current-generation AI chips like Nvidia’s Blackwell, and the more advanced high numerical aperture (high-NA) EUV, currently utilized in research and development by leading companies shaping the future of semiconductors.
Both systems operate through a complex process involving lasers directed at molten tin droplets within a vacuum. This interaction generates plasma, which emits EUV light. This light is then meticulously channeled through ultra-precise mirrors and reflected off a mask containing the intricate chip design. The pattern is subsequently reduced in size and projected onto a silicon wafer. Leading foundries such as TSMC then employ these machines to fabricate chips for design firms like Nvidia.
Competitors in the lithography space, such as Japan’s Nikon and Canon, primarily produce machines for less advanced process nodes. Correonero points out the significant chasm between these players and ASML, stating, “They are large conglomerates which have invested only a tiny fraction of what ASML has invested over three decades. At this point, catching up is virtually impossible.”
## Charting ASML’s trajectory
EUV systems represent the lion’s share of ASML’s order backlog. In the fourth quarter of 2025, EUVs accounted for 7.4 billion euros of the company’s total net bookings, which reached 13.2 billion euros. Throughout 2025, ASML delivered 48 EUV systems, generating 11.6 billion euros in revenue.
While ASML maintains discretion regarding the exact pricing of its machines, industry analysts estimate that its most advanced high-NA EUV systems command between 320 million and 400 million euros, with the low-NA EUV priced around 220 million euros. Currently, leading chip manufacturers like TSMC, Intel, and Samsung are engaged in laboratory-level experimentation with the high-NA EUV technology.
Correonero anticipates a gradual integration into high-volume manufacturing as customers become more familiar with the technology. “High NA is expected to reach high volume manufacturing by 2027-2028, with Intel as the first adopter,” he projected.
ASML’s stock performance has been remarkable, with a 36% surge in 2025 and an additional 32% increase since the start of the current year. Earlier this month, ASML achieved a significant milestone, becoming only the third European company to surpass a market valuation of half a trillion dollars, a level it has maintained. Analysts foresee continued growth for ASML’s stock, driven by the persistent demand for advanced chips essential for the ongoing expansion of AI capabilities. ASML itself forecasts net sales between 34 billion and 39 billion euros for 2026, an increase from the 32.7 billion euros recorded in 2025.
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