Crystal ball: ASML is the only company that produces the EUV lithography machines needed to produce the world’s most advanced chips. Its CEO, Christophe Fouquet, says the AI boom will last 10 to 15 years and that we are only seeing the tip of the iceberg. Meeting this demand will depend on better optics, vertical chip designs and an extensive supplier network that cannot be expanded quickly. This makes ASML’s roadmap a useful benchmark for how far and how fast AI hardware can go.
One planned upgrade is a larger mirror aperture in ASML’s extreme ultraviolet lithography systems. Larger apertures would allow the tools to focus EUV light more precisely, supporting finer patterning and future cutting-edge manufacturing processes.
At the same time, ASML assumes that more circuits will be built vertically rather than distributed across a flat surface. Stacking transistors and other circuits could give chipmakers another way to improve density and performance as further shrinkage becomes more difficult. This approach is likely to be important for AI chips that require more processing power and faster access to memory.
“I think the AI impact on society and industry will take 10 to 15 years,” Fouquet said. “We only see the tip of the iceberg.”
The company’s outlook suggests that AI is creating a longer-term need for advances in semiconductor manufacturing, rather than just a short-term increase in demand for accelerators. These needs extend beyond processors to production tools, packaging technologies, storage, networking devices, and data center systems needed to support AI workloads.
ASML is at the center of this production chain. It is the only company making EUV lithography systems that produce the most advanced chips, and leading foundries use its machines to produce processors for AI applications.
The technology is notoriously difficult to reproduce. An EUV system costs up to about $400 million and contains more than 100,000 parts. Lasers, mirrors, vacuum systems and molten tin droplets work together to generate EUV light and direct it onto silicon wafers. The machines are about the size of a double-decker bus.
ASML relies on a large group of specialized suppliers. For its EUV systems alone, the company works with around 200 key suppliers and around 2,000 companies in the broader supply chain. Zeiss supplies key optics, Trumpf supplies lasers and VDL produces mechatronic systems. ASML acquired laser manufacturer Cymer in 2013 to secure an important part of the EUV system.
This supply chain limits how quickly ASML can increase production. The company cannot increase capacity simply by investing more in assembly plants. It requires access to highly specialized components, production know-how and suppliers that can meet precise technical requirements.
“The more complex our products became, the greater our competitive advantages were,” said Fouquet. “We could [develop] much faster than everyone else.
Nikon and Canon, once major competitors in lithography, continue to focus on deep ultraviolet (DUV) systems. DUV tools are still widely used in chip production, but the most advanced manufacturing requires EUV.
ASML’s position has also led to its technology becoming the focus of export restrictions. The company cannot sell EUV systems to China. The policy prevents Chinese chipmakers from buying the most advanced lithography tools, but also gives China a reason to build its own equipment supply chain.
Fouquet called Huawei a key player in China’s work on DUV devices. China is not yet close to an EUV alternative, but is working to build capacity for DUV systems, components, materials and other parts of semiconductor manufacturing.
ASML has also acquired an 11% stake in French AI company Mistral. The investment gives the company a connection to the European AI software market, although its main role in the AI industry remains its equipment.
For the chip market, ASML’s next advances will be just as important as its current systems. Better EUV optics and vertical chip designs could help the industry further improve performance. But they will also increase the need for specialized production equipment and a supply chain that can keep up with demand.
