Christophe Fouquet, who assumed the role of chief executive at ASML Holding in 2024 after more than a decade with the Dutch semiconductor equipment manufacturer, expressed confidence in the company’s competitive position during an interview at the Milken Institute Global Conference in Beverly Hills this week. The remarks underscore ASML’s continued dominance in extreme ultraviolet (EUV) lithography machines—the specialized equipment essential for manufacturing the world’s most advanced computer chips—at a moment when geopolitical tensions and supply chain competition are reshaping the semiconductor industry.
ASML’s stranglehold on EUV lithography represents one of the most formidable technology monopolies in the world. The company controls approximately 80 percent of the global market for advanced chip-making equipment, a position built over decades through massive research investments, intellectual property accumulation, and partnerships with leading chipmakers. No other manufacturer globally has successfully developed comparable EUV systems, despite sustained efforts from competitors in South Korea, Japan, and China. This technological moat has made ASML indispensable to semiconductor giants like Taiwan Semiconductor Manufacturing Company (TSMC), Samsung, and Intel, which collectively spend billions annually on the company’s machines.
Fouquet’s assertion that competitors are not emerging reflects the extraordinarily high barriers to entry in the sector. Developing EUV lithography equipment requires mastery across multiple domains—optical physics, precision engineering, software systems, and quantum mechanics—combined with access to specialized supply chains that themselves took ASML years to cultivate. The company’s installed base of machines in leading fabs worldwide creates additional network effects, as chipmakers become locked into ASML’s ecosystem through operator familiarity, spare parts dependencies, and software integration. Rivals attempting to break into this space would face initial development costs estimated in the billions of euros, with no guarantee of success.
The competitive landscape remains structurally unchanged despite historical efforts. China’s SMEE (Shanghai Micro Electronics Equipment) has invested heavily in domestic EUV alternatives but remains years behind ASML in critical specifications like resolution and throughput. South Korea’s Samsung and SK Hynix, while major chipmakers themselves, have not successfully pivoted to equipment manufacturing at ASML’s level. Japan’s Tokyo Electron and Nikon possess significant expertise in lithography but have ceded EUV dominance to ASML. These competitors control smaller niches in less advanced process nodes, but the lead in cutting-edge technology remains decisive and widening.
The geopolitical dimension has paradoxically strengthened ASML’s position. United States restrictions on exports to China, implemented under successive administrations citing national security concerns, have insulated ASML from Chinese competition in the most advanced segments while creating revenue concentration among Western allies. European Union industrial policy initiatives aimed at reducing dependence on Taiwan and ASML have yielded limited progress; Intel’s foundry expansion in Europe relies on ASML equipment rather than displacing it. Regulatory frameworks designed to constrain ASML’s market reach have instead reinforced the company’s centrality to global semiconductor supply chains.
For customers, ASML’s monopoly position presents both opportunity and risk. Chipmakers gain access to world-leading technology unavailable elsewhere, allowing them to maintain process leadership and market share in high-margin segments. However, they face limited negotiating leverage on pricing, delivery schedules, and service terms. ASML’s ability to allocate scarce EUV machines between competing customers has become a de facto geopolitical arbitration mechanism, with governments increasingly concerned about access and allocation decisions. Taiwan’s dominance in contract chip manufacturing partly derives from its priority access to ASML equipment, a relationship that creates vulnerabilities should political tensions escalate.
Looking forward, ASML’s monopoly appears durable but not permanent. The company faces pressure from advancing technologies that may eventually reduce EUV’s criticality—including extreme ultraviolet patterning alternatives, maskless lithography, and computational approaches to overcoming physics-based resolution limits. China’s persistent investment in domestic alternatives, combined with potential breakthroughs in competing technologies, could fragment the market over a 10-15 year horizon. For now, however, Fouquet’s confidence reflects material reality: no credible contender has emerged to challenge ASML’s supremacy, and the structural factors enabling that supremacy show few signs of erosion in the immediate term.
