ASML (Advanced Semiconductor Materials Lithography) is often called the most important technology company most people have never heard of. While Nvidia dominates headlines as the leader in artificial intelligence chips, it is ASML’s highly specialized manufacturing technology that makes those chips physically possible. Without ASML, today’s AI revolution would not exist in its current form.
ASML’s Monopoly on EUV Lithography
Nvidia’s most advanced processors, including the H100, H200, and Blackwell GPUs, are built on extremely small semiconductor nodes such as 5nm and 4nm. These tiny transistors cannot be produced using traditional light-based lithography systems. Instead, they require Extreme Ultraviolet (EUV) lithography, which operates at a wavelength of just 13.5 nanometers.
ASML is the only company in the world capable of manufacturing EUV machines. Each system costs between $200 million and $350 million and contains some of the most advanced engineering ever assembled. Without EUV, Nvidia’s chips would be larger, slower, and far less energy efficient — making large-scale AI computing commercially impractical.
The Nvidia–TSMC–ASML Supply Chain
Nvidia is a fabless semiconductor company, meaning it designs chips but relies on external manufacturers to produce them. Its primary manufacturing partner is TSMC, the world’s largest chip foundry — and ASML’s biggest customer.
To meet Nvidia’s soaring demand for AI accelerators, TSMC must purchase large volumes of ASML’s EUV systems. This creates a powerful dependency chain where ASML’s production capacity directly influences how many AI chips Nvidia can deliver globally. In recent years, ASML’s record order backlog has been driven largely by Nvidia-powered data center demand.
Extending Moore’s Law in the AI Era
For decades, Moore’s Law guided semiconductor progress, but by the late 2010s, chip scaling was approaching physical limits. ASML changed that trajectory by spending more than $10 billion and two decades developing EUV technology.
Now, ASML is shipping next-generation High-NA EUV machines, priced near $380 million each. These systems enable chip production at 2nm and even 1.4nm nodes, giving Nvidia a sustained performance-per-watt advantage over competitors like AMD and Intel.
Financial and Strategic Interdependence
Investors often view ASML as a leading indicator of Nvidia’s future growth. Strong ASML bookings signal that chipmakers are preparing for increased Nvidia demand. As Nvidia’s market valuation surged toward $3.5 trillion, ASML’s valuation also climbed past $400 billion reflecting their deep technological interdependence.
Why ASML Has No Real Competitors
EUV lithography machines are among the most complex systems ever built, involving plasma physics, nanometer-precision optics, and over 800 specialized suppliers. Competitors like Nikon and Canon have exited this space entirely, leaving ASML with a near-total monopoly at the cutting edge of chip manufacturing.
While Nvidia designs the brains of the AI era, ASML provides the printing press that brings those brains into physical existence. Without ASML’s decades-long bet on EUV lithography, Nvidia’s dominance in AI hardware and the modern AI boom itself would likely never have happened.
