ASML has emerged as a linchpin in the global semiconductor supply chain thanks to its monopoly on extreme ultraviolet (EUV) lithography systems - enormous, highly specialised machines that cost about $250 million apiece and are essential for manufacturing the most advanced chips used in artificial intelligence applications.
These systems underpin a large portion of ASML’s business, with demand concentrated among manufacturers producing AI-focused semiconductors. Customers include Taiwan Semiconductor Manufacturing Co (TSMC), which fabricates chips for Nvidia, along with South Korea's Samsung and SK Hynix, U.S. firms Intel and Micron, and Japan's Rapidus. The rapid pace of AI development, coupled with global investment in data centres, has been a major factor pushing chipmakers to purchase these tools.
How the machines work
EUV lithography systems are physically imposing: roughly the size of a school bus and with a mass of about 150 tons. Yet they operate at a scale of detail measured in nanometres. The EUV wavelength employed by these machines is 13 nanometres - to put that in perspective, a human hair measures in the order of 80,000 to 100,000 nanometres.
At their core the machines use coordinated laser, mirror and magnetic systems to map microscopic circuit patterns onto silicon wafers. Layers of circuitry are defined by projecting patterned EUV light onto wafers that can hold on the order of a hundred individual AI chips. Industry collaborators have highlighted the combination of patterning precision, scalability and energy efficiency the machines deliver as central to advanced chip fabrication and particularly important for AI chip production.
Key subsystems - lasers, optics and wafer handling
Generating EUV light requires a highly specialised process: tiny droplets of tin are vaporised by extremely powerful lasers at a rate of 50,000 impacts per second. The lasers used in this process are among the most powerful ever produced and are manufactured by a German industrial firm. The resulting EUV light is directed by an optical train of mirrors, produced by a German optics maker, whose surfaces are finished to a smoothness finer than those found on space telescopes. These mirrors operate in a vacuum environment to preserve optical performance.
The silicon wafers are held on a table that levitates on magnetic bearings. During exposure the table must accelerate and decelerate with great speed and precision - on the order of 70 to 80 metres per second - to ensure the patterned light yields accurate circuitry layer after layer.
Logistics and delivery
EUV systems are assembled in the Netherlands. Once complete, each machine is packed into approximately 40 containers and transported by large cargo aircraft - specifically 747 freighters - to customers' fabrication plants. In the most recent year ASML shipped 44 of these EUV systems. Industry analysts expect substantial additional shipments will be required in the 2026 and 2027 timeframe to meet rising production needs.
The concentration of capability within these machines - from EUV generation to the extreme optical precision and magnetic wafer handling - helps explain why few suppliers can match ASML’s offering today, and why advanced semiconductor makers rely heavily on its equipment for AI chip production.