Nvidia’s AI boom couldn’t happen without Dutch chip equipment maker ASML

Nvidia has claimed the title of the world's most valuable company, driven by its cutting-edge chips that are at the forefront of the AI revolution. However, this success story would not be possible without the contributions of ASML, a prominent Dutch semiconductor equipment manufacturer. ASML stands as one of Europe's most valuable companies, known for producing lithography machines essential for crafting intricate patterns on silicon wafers. It holds a commanding 90% share of the lithography market and is the sole producer of extreme ultraviolet (EUV) lithography machines, which are vital for creating the most advanced semiconductors available today. Analysts, including Didier Scemama from Bank of America, have predicted that ASML is on the verge of monopolizing the next-generation EUV lithography sector. He noted that ASML has effectively industrialized this technology, which is expected to drive many transformative trends this decade. In its recent earnings report, ASML revealed that its bookings exceeded analyst expectations by more than double for the fourth quarter of 2025. Morningstar equity analyst Javier Correonero emphasized the importance of lithography, stating that it serves as the foundational element for all chips. He highlighted that ASML's machines are responsible for 99% of semiconductor production, with EUVs playing a critical role in the ongoing development of AI technology. ASML manufactures two types of EUV machines: the low numerical aperture (NA) version, which is utilized for producing the current generation of AI chips like Nvidia's Blackwell, and the advanced high NA model, currently in research and development by companies working on next-gen semiconductors. These machines operate by firing powerful lasers at molten tin droplets, creating plasma that produces EUV light. This light is then manipulated using ultra-precise mirrors to project the chip's intricate designs onto silicon wafers. Chip foundries, such as Taiwan's TSMC, purchase these systems to manufacture chips for designers like Nvidia. Correonero pointed out that competitors like Nikon and Canon, which provide some lithography machines for less advanced technologies, are lagging significantly behind ASML. He noted that these companies have invested only a fraction of what ASML has dedicated over the past three decades, making it nearly impossible for them to catch up. EUVs account for a significant portion of ASML's booking value, contributing 7.4 billion euros ($8.8 billion) out of a total of 13.2 billion euros in net bookings for the fourth quarter of 2025. The company sold 48 EUV systems in 2025, generating 11.6 billion euros in revenue. Analysts estimate that ASML's most advanced high NA EUV machines are priced between 320 million and 400 million euros, while the low NA variant retails at around 220 million euros. Currently, companies like TSMC, Intel, and Samsung are conducting experiments with high NA EUV technology, with Intel expected to be the first to adopt it for high-volume manufacturing by 2027-2028. Following a remarkable 36% rise in share price last year, ASML's stock has surged an additional 32% since January 1. Earlier this month, it became only the third European company to reach a valuation of half a trillion dollars, a milestone it has maintained. Analysts project that ASML's stock will continue to climb as sophisticated chips remain integral to the ongoing expansion of AI technology. The company anticipates net sales of between 34 billion and 39 billion euros in 2026, surpassing its 2025 total of 32.7 billion euros.