As global competition for artificial intelligence chips intensifies, ASML is quietly becoming one of the most critical players in the supply chain. The Dutch technology company builds the complex laser powered machines that print advanced circuits onto silicon chips, making it essential for producing the processors used in AI systems.
Based in Veldhoven in the Netherlands, ASML supplies its machines to leading chipmakers including TSMC and Intel. The company dominates the market for advanced microprocessors by producing precision tools that create extremely small circuitry. Its shares have doubled in value since April last year and are up 25% this month, driven by rising investment from chipmakers responding to higher prices caused by supply shortages.
Investors are now focused on whether ASML will raise its outlook for 2026 when it reports earnings this week. Analysts have already lifted forecasts well above the company’s guidance for flat to modest sales growth. A key reason is ASML’s monopoly on extreme ultraviolet technology, which has positioned it at the center of the global AI expansion led by chip designers like Nvidia. ASML is “the only game in town,” said John West of semiconductor consultancy Yole Group. He explained that EUV uses light beams just 13.5 nanometers thick, compared with a human hair that measures about 80000 to 100000 nanometers.
Rising demand for AI driven cloud services in 2025 has also pushed up prices for memory chips, affecting smartphones, computers and gaming consoles. Chipmakers are increasing capital spending to expand capacity. TSMC plans to raise spending by 37% in 2026 to $56 billion. Samsung is targeting a 24% increase to $40 billion, while SK Hynix plans a 25% rise to $22 billion. Micron aims to lift spending by 45% to $20 billion. Analysts estimate about 25% of chipmaker capital spending goes to lithography equipment, much of it to ASML, with AI chips likely to push this share higher. “Are you really going to risk all that on picking the wrong lithography tool?” asked industry expert Dan Hutcheson, highlighting why ASML’s dominance is expected to last.
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