In Oberkochen, a town of about 8,000 in southwestern Germany, Zeiss is making room. The company’s semiconductor unit said last month that it had rebuilt part of its headquarters site to free space for production, and it is constructing a factory on a second Zeiss property nearby. Executives said more expansion is possible if orders keep rising.
The building work is aimed at investors as much as at customers. Zeiss, the sole supplier of the mirror optics inside ASML’s extreme ultraviolet lithography machines, says it can handle the surging demand for the components that go into advanced AI chips, pushing back on worries that it is an unavoidable chokepoint in the AI supply chain, Bloomberg reported Aug. 3.
The stakes are high because the parts are hard to make. Each EUV machine uses dozens of mirrors, ground and polished to tolerances measured in fractions of a nanometer and coated with layers of molybdenum and silicon that reflect the machine’s 13.5-nanometer light. Some of the optics are among the most precise objects ever manufactured, and producing them takes months. That makes the optics column one of the slowest links in the entire chipmaking-tool pipeline.
EUV machines are the most expensive equipment in semiconductor manufacturing. A next-generation high-NA model costs about $380 million, and ASML is the only company that builds them. The machines are used by TSMC, Samsung and Intel to print the leading-edge logic chips that power AI accelerators, and demand for those chips has stretched the entire supply chain.
ASML has said it cannot build machines fast enough. In April, the company raised its 2026 revenue outlook after first-quarter orders came in stronger than expected, and Chief Executive Christophe Fouquet said supply would not meet demand for the foreseeable future. The order backlog has grown even as the company expands output, according to people familiar with the matter.
That is where Zeiss comes in. Its semiconductor division, known as Zeiss SMT, supplies the optical systems that go inside every EUV and high-NA EUV machine ASML ships, under a technology partnership that dates back decades and a roadmap agreement that stretches 15 years out. The unit, once a small side business inside a company best known for camera lenses and microscopes, has grown into one of the group’s largest operations as chipmakers built out EUV capacity. Any delay in the optics column shows up directly in ASML’s delivery schedule, which is why investors have treated Zeiss’s capacity as a question mark hanging over the industry.
The company’s answer, delivered through its capital plans, is that the glass will not be the constraint. The rebuilt Oberkochen facility, combined with the new factory on a second site, is designed to lift output of EUV optics as ASML ramps deliveries, and Zeiss says it can add capacity beyond that if customers commit to the volumes. The expansion is also meant to shorten lead times for the most complex components, according to a person familiar with the plans.
Analysts said the statement matters because it removes one of the few supply questions investors cannot measure. Order books at ASML and its customers are public; the internal capacity of a privately held optics maker is not. Zeiss’s decision to signal room to grow gives the industry a visible answer to a question it had been forced to guess at. Investors remember the recent past: optics-related production problems contributed to EUV delivery delays earlier in the decade, and fabs built their expansion schedules around the toolmaker’s promises.
The reassurance does not mean the squeeze is over. High-NA machines require larger mirrors and tighter tolerances than the current generation, and each new fab line that comes online adds demand for more tools. Intel was the first buyer of high-NA machines, and TSMC and Samsung have followed, a pipeline that will consume optics for years. Even with Zeiss’s expansion, ASML’s ability to deliver will remain tight for at least the next two years, analysts said. The point of Zeiss’s message is narrower: it does not intend to be the reason a machine ships late.
The optics question is one link in a longer chain. EUV machines depend on lasers from Trumpf, on components from dozens of suppliers across Europe and Asia, and on clean-room capacity at the fabs that install them. But optics were singled out because they are single-sourced and slow to make. With Zeiss’s capacity commitment, the constraint that worried investors has moved elsewhere, to the fabs themselves and to the memory chips that must be stacked beside every AI processor.
For ASML’s customers, the message is quietly reassuring. TSMC, Intel and Samsung are building new lines on the assumption that EUV tools will arrive on schedule, and their production plans for AI chips depend on it. Zeiss’s building projects in Oberkochen are a sign that the industry’s most specialized supplier believes the demand is real, and is betting its own money on it.
