Abubakr Buleshov | 05.12.2025
ASML: The Most Important Company You've Never Heard Of
Microchips are an essential building block in all modern technology; they are used in technology from smartphones, computers, to even AI. Fundamentally, they are like the tiny ‘brains’ which make most electronic devices work, as they process information, store data, and control functions. ASML, a Dutch multinational tech company, is the world's leading supplier of photolithography machines critical for making microchips, the sole producer of advanced Extreme Ultraviolet (EUV) lithography systems. Therefore, this technology is a near-monopoly power, making it economically crucial and geopolitically sensitive. This article will explore ASML’s importance through 3 key points: its near monopoly on tools essential for microchip production technology, extraordinary innovation, which makes it impossible to replicate, and the geopolitical tension created as global powers compete for control over the semiconductor supply chain.
What Does ASML Do?
ASML builds the machines that carry out lithography. A process of printing microscopic circuit patterns onto silicon wafers. These patterns form the transistors that power every modern electronic device. There are two main types: DUV, used for older or mid-range chips, and EUV. ASML is the only company in the world that can manufacture EUV machines. Without these tools, chipmakers like TSMC in Taiwan, Samsung and Intel simply cannot produce cutting-edge processors.
ASML’s Monopoly Power
ASML controls 100% of the EUV lithography market and around 90% of the DUV market, making it one of the strongest natural monopolies in modern technologies and global markets in general. Each EUV machine costs more than ~$150 million and contains over 100,000 components supplied by nearly 5,000 specialised suppliers, making the replication practically impossible. This extreme complexity of production creates barriers to entry, such as R&D requirements, scarce specific expertise, precision pinpoint-level engineering, and a global supplier network. Thus, ASML is a classic and a great example of a natural technological monopoly, not because it blocks competitors on purpose and stops new firms from entering the market directly, but because the technology itself is so insanely advanced that no one else can realistically build it.
Why Can No One Catch Up to Them?
ASML’s unique position in the market comes from its unprecedented level of innovation. EUV lithography took over 20 years and €8-€10 billion in R&D to develop, involving groundbreaking breakthroughs in development in optics, lasers and vacuum engineering. ASML works closely with Zeiss, which produces mirrors so precise that their allowable error is measured in atoms. The EUV light source itself requires a laser to fire 50,000 tin-droplet explosions per second. This level of engineering, combined with ASML’s long-term partnerships and accumulated knowledge, creates a self-reinforcing loop; only ASML sells EUV -> all advanced chipmakers depend on them -> ASML invests more into R&D -> competitors fall even further behind.
Geopolitics: ASML in the US-China Tech Battle
ASML’s dominance has turned into a sort of ‘geopolitical asset’. The United States has pressured the Dutch government to block ASML from selling EUV machines to China because, without EUV, China cannot manufacture advanced chips needed for AI, military systems, and high-performance computing. In response to that, China is trying to build its own lithography tools, but experts estimate it is still 10 years behind. This conflict is part of the broader idea of tech sovereignty, where nations want control over critical technologies and supply chains for their own benefit. ASML, once a niche engineering firm, is now at the centre of one of the world’s biggest strategic competitions.
ASML metaphorically has become the silent backbone of the digital world, powering everything from something you use every day, such as smartphones, to AI supercomputers. Its monopoly exists not through regulation and purposeful barriers to entry, but through unmatched innovation and engineering complexity, all thanks to investing in the R&D of ASML. As technology advances and demand for smaller, faster and more efficient chips grows, especially because of the trending rise in demand for AI. ASML’s influence will only expand. The company proves how a single, highly specialised firm can hold up the entire global tech ecosystem and shape the geopolitical landscape.
What Does ASML Do?
ASML builds the machines that carry out lithography. A process of printing microscopic circuit patterns onto silicon wafers. These patterns form the transistors that power every modern electronic device. There are two main types: DUV, used for older or mid-range chips, and EUV. ASML is the only company in the world that can manufacture EUV machines. Without these tools, chipmakers like TSMC in Taiwan, Samsung and Intel simply cannot produce cutting-edge processors.
ASML’s Monopoly Power
ASML controls 100% of the EUV lithography market and around 90% of the DUV market, making it one of the strongest natural monopolies in modern technologies and global markets in general. Each EUV machine costs more than ~$150 million and contains over 100,000 components supplied by nearly 5,000 specialised suppliers, making the replication practically impossible. This extreme complexity of production creates barriers to entry, such as R&D requirements, scarce specific expertise, precision pinpoint-level engineering, and a global supplier network. Thus, ASML is a classic and a great example of a natural technological monopoly, not because it blocks competitors on purpose and stops new firms from entering the market directly, but because the technology itself is so insanely advanced that no one else can realistically build it.
Why Can No One Catch Up to Them?
ASML’s unique position in the market comes from its unprecedented level of innovation. EUV lithography took over 20 years and €8-€10 billion in R&D to develop, involving groundbreaking breakthroughs in development in optics, lasers and vacuum engineering. ASML works closely with Zeiss, which produces mirrors so precise that their allowable error is measured in atoms. The EUV light source itself requires a laser to fire 50,000 tin-droplet explosions per second. This level of engineering, combined with ASML’s long-term partnerships and accumulated knowledge, creates a self-reinforcing loop; only ASML sells EUV -> all advanced chipmakers depend on them -> ASML invests more into R&D -> competitors fall even further behind.
Geopolitics: ASML in the US-China Tech Battle
ASML’s dominance has turned into a sort of ‘geopolitical asset’. The United States has pressured the Dutch government to block ASML from selling EUV machines to China because, without EUV, China cannot manufacture advanced chips needed for AI, military systems, and high-performance computing. In response to that, China is trying to build its own lithography tools, but experts estimate it is still 10 years behind. This conflict is part of the broader idea of tech sovereignty, where nations want control over critical technologies and supply chains for their own benefit. ASML, once a niche engineering firm, is now at the centre of one of the world’s biggest strategic competitions.
ASML metaphorically has become the silent backbone of the digital world, powering everything from something you use every day, such as smartphones, to AI supercomputers. Its monopoly exists not through regulation and purposeful barriers to entry, but through unmatched innovation and engineering complexity, all thanks to investing in the R&D of ASML. As technology advances and demand for smaller, faster and more efficient chips grows, especially because of the trending rise in demand for AI. ASML’s influence will only expand. The company proves how a single, highly specialised firm can hold up the entire global tech ecosystem and shape the geopolitical landscape.
