ASML: The Monopoly That Enables the Semiconductor Age

ASML's competitive position is unique in the history of industrial capitalism. The company holds a 100% market share in EUV lithography — the technology required to manufacture semiconductors at 7nm and below. Every advanced chip in every iPhone, every NVIDIA GPU, every AMD processor is manufactured using ASML equipment.

The High-NA EUV system, which ASML began shipping in 2024, represents the next generation of lithography technology. It enables semiconductor manufacturing at sub-2nm process nodes, which are required for the next generation of AI accelerators. TSMC, Intel and Samsung have all committed to High-NA EUV adoption.

ASML's installed base of over 4,000 systems generates a recurring revenue stream from service contracts, upgrades and spare parts that provides significant earnings visibility. Service revenue now represents approximately 30% of total revenue and carries higher margins than system sales.

The primary risk to ASML's investment thesis is geopolitical: export restrictions on EUV systems to China have already reduced ASML's addressable market by approximately 15%. Further restrictions on DUV systems — which China still uses for mature node manufacturing — represent the key downside scenario.

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