ASML: The Monopoly on Physics

ASML Holding N.V. develops, produces, markets, sells, and services advanced semiconductor equipment systems for chipmakers. It offers advanced semiconductor equipment systems, including lithography, metrology, and inspection systems. The company also provides extreme ultraviolet lithography systems; and deep ultraviolet lithography systems comprising immersion and dry lithography solutions to manufacture various range of semiconductor nodes and technologies. In addition, it offers metrology and inspection systems, including YieldStar optical metrology systems to assess the quality of patterns on the wafers; and HMI electron beam solutions to locate and analyze individual chip defects. Further, the company provides computational lithography solutions, and lithography systems and control software solutions; and refurbishes and upgrades lithography systems, as well as offers customer support and related services. It operates in Japan, South Korea, Singapore, Taiwan, China, rest of Asia, the Netherlands, rest of Europe, the Middle East, Africa, and the United States. The company was formerly known as ASM Lithography Holding N.V. and changed its name to ASML Holding N.V. in 2001. ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands.

Executive Summary

ASML Holding NV (ASML) is the most critical company in the global technology supply chain. It holds a de facto monopoly on Extreme Ultraviolet (EUV) lithography machines—the tools required to print the world's most advanced chips (7nm and below). Without ASML, Moore's Law stops. We view ASML not as a hardware manufacturer, but as a toll booth on the future of humanity.

1. The EUV Monopoly

Lithography is the bottleneck of chip manufacturing.

100% Market Share: ASML is the only company in the world that can build EUV machines. Canon and Nikon gave up years ago.
Physics Moat: An EUV machine generates light by blasting microscopic droplets of tin with a high-power laser 50,000 times per second. This engineering feat took 20 years and billions of Euros to master. It is effectively impossible to replicate.
High-NA Era: The next generation "High-NA" instruments ($350M+ per unit) are already being deployed to Intel and TSMC, extending the roadmap to 2nm and beyond.

2. Financial Quality

ASML combines the margins of software with the lock-in of utilities.

Pricing Power: Because there is no alternative, ASML can pass on inflationary costs to customers (TSMC, Samsung, Intel) without losing volume.
Service Revenue: The installed base of lithography systems generates recurring maintenance and upgrade revenue, providing a cushion against cyclical CapEx downturns.

3. Geopolitical Risk & Opportunity

ASML is caught in the crossfire of the US-China chip war.

China Restrictions: The US, Dutch, and Japanese governments have restricted ASML from selling its most advanced EUV (and even some DUV) tools to China.
: However, the global push for "Digital Sovereignty" (US CHIPS Act, EU Chips Act) is creating artificial demand. Every major region wants its own fabs, and every fab needs ASML machines. Duplication of supply chains = Multiplication of ASML orders.

ASML: The Monopoly on Physics

Executive Summary

1. The EUV Monopoly

2. Financial Quality

3. Geopolitical Risk & Opportunity

Risks to the Thesis

Conclusion

ASML Valuation Model

Strategic Assets

ASML Deep Dive

Market Update: ASML - 2025-12-22

ASML Holding N.V. (ASML)

The Semiconductor Primer

INVESTMENT PRIMER

Market Update: ASML - 2025-12-22

ASML