As AI companies compete for Nvidia’s chips to fuel the boom, ASML has secured a crucial role in the supply chain by making the laser-based machines used to manufacture those chips. The Dutch firm supplies giant, ultra-precise lithography systems that imprint microscopic circuits onto silicon, serving major clients such as TSMC and Intel. It dominates the market for advanced processors used in AI, largely due to its monopoly on extreme ultraviolet technology.

Based in Veldhoven, ASML has seen its share price surge, doubling since last April and jumping sharply this month, as chipmakers ramp up spending amid supply shortages that are driving chip prices higher. Investors are now focused on whether the company will raise its outlook for 2026 when it reports earnings, as analysts’ forecasts have already moved well above company guidance.

ASML’s exclusive control of EUV technology has allowed it to benefit from Nvidia’s rise during the global AI race. The technology uses extremely thin light beams, generated by firing lasers at vaporized tin droplets, to etch ever-smaller circuits. Strong demand for AI-driven cloud services has triggered shortages in memory chips, pushing up prices for consumer electronics and prompting manufacturers to boost capital spending. ASML’s largest customers, including TSMC, Samsung, SK Hynix, and Micron, are planning major increases in investment, with a significant share of that spending going toward lithography equipment.

Although ASML faces competition in older chipmaking technologies, experts say its leadership in advanced lithography is likely to persist. With the industry investing vast sums in future generations of ASML tools, switching suppliers would be risky, making ASML’s position in the chip ecosystem extremely hard to challenge.