Every leading-edge chip factory in the world depends on a single company for its most important piece of equipment, and that company’s chief executive says the situation is not about to change.
Christophe Fouquet, the chief executive of ASML, said in an interview published by the Financial Times on September 28 that only one company can make the most advanced machines used to print chips, and that company is his. The moat, as he described it, is ASML’s exclusive grip on extreme-ultraviolet lithography, the technique that etches the finest circuits onto silicon.
The claim is not much of an exaggeration. ASML, based in Veldhoven in the Netherlands, is the only manufacturer of EUV machines, which cost hundreds of millions of dollars apiece and are roughly the size of a city bus. Every foundry that makes the most advanced processors, from Taiwan Semiconductor Manufacturing Company to Samsung and Intel, must come to ASML to buy them. There is no second source.
That monopoly has made ASML one of Europe’s most valuable companies and one of its most strategically watched. Its machines sit on the Wassenaar Arrangement list of dual-use technologies, which means exporting them requires government approval. Governments from Washington to The Hague treat ASML as a lever in the competition over who can build the next generation of chips, and the company has spent years caught between customers who want its machines and capitals that want to control where they go.
Fouquet’s message in the interview was that this position is durable. The technology took decades and tens of billions of dollars to develop, and the gap between ASML and any would-be rival has only grown. The company, founded in 1984 as a joint venture with Philips, spent years in the wilderness before EUV worked, and the next generation of the technology, called High-NA EUV, has already been shipped to its first customers.
Building an EUV machine requires thousands of specialized components, and the supply chain behind it is itself concentrated. The optics, made by the German firm Zeiss, have no equivalent anywhere in the world. ASML has effectively kept Zeiss in business through the lean years, extending a loan and an advance worth hundreds of millions of euros to make sure the optics maker could keep investing.
That concentration is exactly what the Dutch government is trying to protect. On the same day the interview appeared, the government disclosed a 15 million euro investment in KMWE, a precision-parts supplier to ASML based in Eindhoven. KMWE, founded in 1955, makes the ultra-precise metal components and assemblies that go into chipmaking machines and other high-tech equipment. The investment is a modest sum by the standards of the semiconductor industry, but its purpose is larger: to keep critical suppliers rooted in the Netherlands rather than losing them to rivals or to other countries.
The gesture reflects a growing anxiety across Europe that the continent depends on a handful of companies it cannot afford to lose. ASML is the crown jewel of that argument. If its suppliers drift away, or if political pressure pushes production elsewhere, the entire EUV monopoly could weaken in ways that take a decade to repair.
Fouquet has reason to sound confident. ASML’s order book is tied to the same AI buildout that is driving demand for the chips its machines produce. The more advanced the chip, the more layers EUV must print, and the more machines a foundry must buy. That dynamic has kept ASML’s customers lined up even as the industry debates how long the boom can last.
Still, a monopoly is also a target. Competitors are spending on alternatives, and governments are investing in their own supply chains, as the KMWE deal shows. The question is not whether someone will eventually challenge ASML’s position, but how many years the lead will hold.
The geopolitics of it have only sharpened the point. The United States and the Netherlands have spent years restricting where ASML’s machines can be sold, and China has responded by pouring money into building its own lithography industry, so far without matching the EUV technology. That contest has turned ASML into a company that is as much an instrument of policy as a supplier of equipment, and it is one more reason the Dutch government wants to keep the supplier base close. A company that controls the world’s supply of a critical machine cannot treat its own supply chain as an afterthought.
For now, the answer Fouquet is offering is the simplest one: the machines that make the modern economy’s chips come from one place, and that place is not moving. The unresolved question is whether the governments that depend on ASML can keep the ecosystem around it intact long enough for that answer to stay true.
