In the Dutch town of Veldhoven, in the province of North Brabant, something has happened over the past forty years that has no precedent in the history of modern industry. From a small, risky project spun out of the Philips conglomerate, a company has grown without which the modern world could not function. ASML is today the undisputed hegemon in the field of advanced semiconductor manufacturing equipment. In 2026, its market value makes it the most valuable company in Europe. However, the path to this monolithic status was neither simple nor obvious. It was a path paved with technological madness, billion-dollar investments in research and development, and a series of risky decisions that could have driven the company to bankruptcy at every step.
ASML’s roots go back to the 1980s, when the Philips conglomerate was looking for a way to commercialise its own failed lithography projects. In 1984, a decision was made to spin off this venture into a separate joint venture with the Dutch company ASM International. The new company, named ASML, had only a few dozen employees and modest facilities, and its first years of operation were a string of failures and constant balancing on the edge of bankruptcy. At that time, the lithography machine market was dominated by giants from Japan and the United States, and the small Dutch start-up was not taken seriously.
The breakthrough came in 2001, when ASML, still a relatively small player, made a decision that would forever change its fortunes. Instead of following the beaten path of improving existing technologies, the company bet everything on one card. It decided to develop the extremely ambitious technology of extreme ultraviolet lithography (EUV), which involved using radiation with a wavelength on the border of X-ray radiation. It was a technological leap that seemed impossible to achieve. Over the next sixteen years, ASML invested about 10 billion dollars in this project, often being the only one convinced of its validity. Competitors considered EUV too complex and costly a technology, which allowed ASML to build an insurmountable advantage.
The birth of a company that would change the world
The heart of ASML’s power is its EUV lithography machines, which are without doubt the most complex devices produced by humanity. They are structures the size of a double-decker bus, weighing over 150 tonnes and consisting of thousands of kilometres of cables, pipes and precisely machined components.
Their task is to expose silicon wafers to create miniature electrical circuits on them. This process is carried out by reflecting a laser beam off precisely manufactured mirrors, which requires maintaining them in position with atomic accuracy.
EUV stands for extreme ultraviolet, meaning radiation with such a short wavelength that it does not occur in nature. To produce it, ASML machines fire a laser at tiny droplets of tin, which vaporise and emit UV light. This light is then reflected off a series of mirrors, transferring complex circuit patterns with a resolution of just a few nanometres onto the wafer.
Each such machine costs between 200 and as much as 400 million dollars. That is more than the price of a modern fighter jet, and yet the world’s largest chipmakers are queuing up to get them.
How an engineering marvel works?
ASML currently has an absolute monopoly on the production of the most advanced EUV lithography machines. This is not a monopoly created by administrative barriers but by technological and knowledge barriers that are practically impossible for competitors to overcome.
The company spent billions of dollars on research and development over two decades before EUV technology became commercially viable. Competitors cannot close this gap because it would require similar, multi-year investments from them that would only pay off after years.
A key element of this monopolistic ecosystem is also ASML’s close cooperation with Carl Zeiss ZMT, which is the only supplier in the world capable of producing the specialised mirrors essential for EUV machines. This partnership further tightens the system, as no competitor has access to these critical components.
The machines themselves are so complex that their transport and installation require the involvement of an ASML engineering team. The shipping process for one device involves about 40 containers, and its installation at the customer’s site is carried out by a team of specialists.
Why no one can catch up with ASML?
The year 2026 is a period of unprecedented growth for ASML, driven primarily by the revolution in artificial intelligence. In July 2026, the company raised its sales forecast for the second time in a year, estimating annual revenue at between 43 and 45 billion euros. This is well above previous forecasts, which assumed 36-40 billion euros. ASML CEO Christophe Fouquet explicitly states that sustained investment in artificial intelligence is driving demand for advanced logic and memory chips.
The scale of this growth is impressive. In the second quarter of 2026, ASML’s net sales amounted to 9.3 billion euros, compared with 7.7 billion euros a year earlier. The company closed the full year 2025 with record revenues of 32.7 billion euros and net profit of 9.6 billion euros.
The value of the order backlog at the end of 2025 reached 388 billion euros, giving a picture of enormous hunger in the market. Growing demand for chips for AI applications means that ASML’s customers, such as TSMC, Intel and Samsung, are accelerating their plans to expand production capacity, and ASML itself is working to reduce the production time of its machines by about one third to keep up with demand.
How the artificial intelligence boom is driving Europe’s most valuable company?
Growing demand for even more efficient chips means that ASML is not resting on its laurels. The company is introducing a new generation of its machines, known as High-NA (High Numerical Aperture) EUV. These devices, costing more than 400 million dollars each, offer even higher resolution and allow the production of chips with even smaller dimensions. In July 2026, ASML announced that Intel had already begun using these state-of-the-art machines at its Oregon plant to produce processors from the Ultra 3 line.
This shows that ASML is not only strengthening its dominance in existing technology but also setting new standards for the future of the entire industry. Each successive technological step widens the gap between it and potential competitors. The cycle of investment in research and development, which takes years and costs billions, is an insurmountable barrier for companies that do not have such vast resources and time advantage. ASML has thus become not only a machine manufacturer but an architect of technological progress that defines the possibilities of the entire semiconductor sector.
ASML’s power, however, comes at a price. The company has found itself at the centre of the geopolitical technology war between the United States and China. Washington has for years been pressing its allies, including the Netherlands, to restrict the export of advanced technologies to China, which directly affects ASML. China was ASML’s most important market in 2025, accounting for about 33 percent of its global revenue. In the fourth quarter of 2025 alone, China’s share of ASML’s system sales was 36 percent.
American pressure is having an effect. China’s share of ASML’s revenue fell from 41 percent in 2024 to 33 percent in 2025, and in the first quarter of 2026, a sharp drop to just 19 percent was recorded. In the US Congress, work is underway on legislation that would force US allies to completely halt the servicing of ASML machines already installed in China. This would be a disaster for China’s semiconductor industry, as without service and spare parts, advanced machines lose their performance. ASML, although it does not formally sell its most expensive EUV machines to China, faces serious challenges related to the loss of one of its key markets. This shows that even an absolute technological monopolist cannot escape the geopolitical conditions that shape world trade.
