Nvidia has emerged as the globe’s most valuable firm due to its innovative chips that fuel the AI surge. Yet, its triumph is tied to ASML.
The Dutch semiconductor manufacturing firm, among Europe’s most esteemed, produces lithography machines essential for etching exceedingly intricate designs on silicon wafers.
It is the sole producer globally of extreme ultraviolet (EUV) lithography machines used for fabricating the most sophisticated semiconductors. It commands a 90% stake in the broader lithography sector.
Bank of America analyst Didier Scemama forecasted that it may soon attain a monopoly in next-gen EUV lithography. “ASML has brought next-gen EUV (Extreme Ultraviolet) lithography technology into large scale production, which we believe will support numerous transformative trends of this decade,” he noted in a Wednesday memorandum.
His memorandum followed ASML’s earnings announcement revealing bookings were significantly above analyst predictions in the final quarter of 2025.
Catching up to ASML ‘is nearly impossible’
Javier Correonero, equity analyst at Morningstar, conveyed to CNBC that lithography is “the foundation of any chip,” emphasizing that ASML devices are involved in crafting 99% of semiconductors.
However, it’s the EUVs that are vital for AI development.
ASML produces two variations of EUVs: low numerical aperture, utilized for the current generation of AI chips, such as the Nvidia Blackwell, and the more sophisticated high numerical aperture, employed in research and development by firms inventing next-gen semiconductors.
Both machines utilize powerful lasers directed at molten tin droplets within a vacuum, generating plasma that emits EUV light. This light is then directed using highly accurate mirrors and reflected off a mask showcasing the pattern for one layer of the chip, which is subsequently reduced and projected onto a silicon wafer.
Such systems are procured by chip foundries like the Taiwanese TSMC, which are engaged by chip designers such as Nvidia.
Correonero remarked that businesses like Japan’s Nikon and Canon, which deliver some lithography machines for non-advanced process nodes, are “far-off competitors.”
“They are large corporations that have invested only a minor portion of what ASML has committed over three decades. Currently, catching up is almost impossible,” he added.
Looking forward
EUVs represent the majority of ASML’s booking value, contributing 7.4 billion euros ($8.8 billion) towards a total of 13.2 billion euros in net bookings in the final quarter of 2025. Throughout 2025, the firm sold 48 EUV systems, yielding 11.6 billion euros in revenue.
While ASML doesn’t disclose the costs of its machines publicly, analysts informed CNBC that the price for its most advanced high NA EUV ranges from 320 million to 400 million euros. Its low NA EUV is priced at about 220 million euros, Correonero stated.
Firms like TSMC, Intel, and Samsung are currently testing the high NA EUV in a lab context, he further mentioned.
“Once customers become familiar with the tool, it is slowly integrated into high-volume manufacturing. High NA is anticipated to enter high-volume manufacturing by 2027-2028, with Intel being the first to adopt,” Correonero explained.
ASML’s stock price increased by 36% last year. It has surged another 32% since the beginning of the year. Earlier this month, it became only the third European company to achieve a valuation of half a trillion dollars, gains it has maintained.
Analysts project the share price to continue climbing, as advanced chips remain essential for the ongoing AI expansion. ASML anticipates that 2026 will see net sales reach between 34 billion and 39 billion euros, exceeding the 32.7 billion euros it secured in 2025.
