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ASML builds the giant, ultra-precise machines that computer chip factories use to print microscopic patterns onto silicon wafers.
ASML makes the machines that make computer chips. Its customers are the world's biggest chip factories — companies like TSMC, Samsung, and Intel — and they pay millions of dollars per machine because without ASML's tools, you cannot build the most advanced chips on earth.
The core problem is this: a modern chip has features measured in single-digit nanometers, far smaller than a wavelength of visible light. ASML's most important product, the extreme ultraviolet (EUV) lithography machine, solves that by firing tin droplets into a plasma to create a light source so precise it can etch patterns a few atoms wide. Each EUV machine is roughly the size of a bus, weighs over 150 tons, and ships in pieces to customers who need months to install it. One machine can cost well over $200 million. That is why ASML is essentially the only company on the planet that can supply this step — a true monopoly on the most critical part of making leading-edge chips. The business is built on deep moats: thousands of suppliers, decades of research, and patents that competitors cannot easily copy. Its main rival, Japan's Nikon, has largely fallen behind in EUV. ASML also earns steady money servicing and upgrading the machines it has already sold, which keeps customers locked in for years. In its most recent full year, 2023, ASML booked roughly €27.6 billion in revenue, and demand for AI chips has kept order books strong.
In 1984, Philips and ASMI teamed up to build machines for the young chip industry, starting in a leaky shed near a Philips office in Eindhoven. The idea came from research stretching back to the early 1970s, and the same year the company launched its first machine, the PAS 2000 stepper. It was a humble start for a business that would one day matter to almost every computer on earth.
Four years in, the young company had few customers and could not stand on its own, and ASMI pulled out during an industry downturn while Philips was cutting costs. A Philips board member, Henk Bodt, talked his colleagues into one last helping hand, and that kept the company alive. It also took the name ASML this year, as if starting fresh.
Then came the PAS 5500, ASML's first real commercial hit. Its modular design meant broken parts could be fixed quickly on site and machines could serve longer, a practical edge that reportedly won an order from IBM over Japanese rivals. That success pushed ASML into fierce competition with the market leaders, Canon and Nikon, a rivalry that would shape the industry for years.
In 1995, ASML became a fully independent public company, listed in Amsterdam and New York. Philips sold half its shares at the listing and the rest over the following years, and the money raised helped fuel growth. The child of Philips and ASMI was finally on its own two feet.
ASML then bought the American lithography equipment maker Silicon Valley Group, which was short on cash. The deal came with an arrangement to supply advanced 193 nm scanners to Intel, giving ASML a stronger foothold in the United States.
The same year, ASML introduced TWINSCAN, a system with two stages: one wafer gets exposed while the next is measured and lined up. That kept the machine busy and made each chip more precise, a big jump in value for customers.
In 2007, ASML bought BRION, a company that helped optimize chip design and manufacturing. This started what ASML called Holistic Lithography: pairing its machines with process know-how before, during and after the actual printing step.
ASML shipped its first prototype extreme ultraviolet tool, the TWINSCAN NXE:3100, to an Asian chipmaker's research site. EUV uses light with a much shorter wavelength to print smaller features, the key to faster, more powerful chips. It was a peek at the future, though the road to making it practical would be long.
EUV research was getting expensive, so ASML sold a 23% slice of itself to its three biggest customers, Intel, TSMC and Samsung, to share the cost. Intel put in $4.1 billion for a 15% stake and support for the move to larger 450 mm wafers. It was an unusual deal: the customers were betting on their own supplier.
ASML then bought Cymer, the San Diego maker of the light sources inside its lithography machines, to push EUV along faster. Owning the light source meant owning a critical piece of the puzzle.
In October 2024, ASML shares fell 15.6% in a day after quarterly orders came in at about 2.6 billion euros, less than half the prior quarter. Export restrictions to China and weak demand outside AI led management to cut its 2025 revenue guidance. For a company used to riding high, it was a sharp reminder that chip demand moves in waves.
Two years later, the picture looked very different: ASML raised its full-year sales outlook to between 36 and 40 billion euros, up to 22% growth, as AI demand drove orders from TSMC, Samsung and Intel. CEO Christophe Fouquet said orders were very strong and supply shortages were expected for the foreseeable future. Its shares had climbed about 40% that year, making it Europe's most valuable company, a long way from a leaky shed in Eindhoven.
The risks are real. ASML sits at the center of a geopolitical fight: the U.S. and Dutch governments have restricted exports of advanced chipmaking equipment to China, which hurts a meaningful slice of its sales. The company is also hugely dependent on a handful of giant customers, so a slowdown at TSMC or Samsung ripples straight through. Still, ASML invests heavily in next-generation tools and returns cash to shareholders through dividends and buybacks, betting that the world will keep needing smaller, faster chips.
Saved answer · last researched 19 Oct 2026