Nvidia’s AI Expansion Relies on ASML’s Dominance in Chipmaking Technology

Nvidia has risen to become the world’s most valuable company, driven by its advanced chips powering the artificial intelligence revolution. Yet its success is inseparable from ASML, the Dutch semiconductor equipment manufacturer that plays a critical role in producing the most sophisticated chips.

ASML, one of Europe’s most valuable firms, builds lithography machines that etch ultra‑fine patterns onto silicon wafers. It is the only company globally capable of manufacturing extreme ultraviolet (EUV) lithography systems, essential for producing cutting‑edge semiconductors, and currently holds a 90% share of the broader lithography market. Bank of America analyst Didier Scemama recently noted that ASML has industrialized next‑generation EUV technology, predicting it will underpin many disruptive trends of the decade and eventually secure a monopoly in this field. His comments followed ASML’s fourth‑quarter 2025 earnings report, which revealed bookings more than double analyst expectations.

Javier Correonero, equity analyst at Morningstar, described lithography as “the building block of any chip,” emphasizing that ASML machines have contributed to the production of 99% of semiconductors. EUV systems are particularly vital for AI development. ASML produces two types: low numerical aperture EUVs, used for current AI chips such as Nvidia’s Blackwell, and high numerical aperture EUVs, deployed in research and development for next‑generation semiconductors. These machines use powerful lasers to strike molten tin droplets in a vacuum, generating plasma that emits EUV light. The light is directed by precision mirrors and reflected off a patterned mask, which is then reduced and projected onto a silicon wafer.

Chip foundries such as Taiwan’s TSMC purchase these systems to manufacture chips designed by companies like Nvidia. Correonero noted that rivals such as Japan’s Nikon and Canon remain distant competitors, supplying lithography machines for less advanced nodes but investing only a fraction of what ASML has committed over three decades. He concluded that catching up to ASML is “virtually impossible.”

EUV systems accounted for the majority of ASML’s booking value in the fourth quarter of 2025, contributing €7.4 billion ($8.8 billion) out of €13.2 billion in net bookings. The company sold 48 EUV systems during the year, generating €11.6 billion in revenue. Analysts estimate the cost of ASML’s most advanced high NA EUV machines at between €320 million and €400 million, while low NA EUVs are priced around €220 million. Companies including TSMC, Intel and Samsung are currently testing high NA EUVs in laboratory settings, with Intel expected to be the first to adopt them for high‑volume manufacturing between 2027 and 2028.

ASML’s share price rose 36% in 2025 and has already gained another 32% since the start of 2026. Earlier this month, it became only the third European company to reach a valuation of half a trillion dollars, a milestone it has maintained. Analysts anticipate further growth as advanced chips remain central to AI expansion. ASML projects net sales of €34 billion to €39 billion in 2026, surpassing the €32.7 billion recorded in 2025.