ASML Holding (ASML)

EUV lithography monopoly (ASML) — the sole maker of machines for sub-7nm chips; the deepest moat in tech

AI exposure 36% — derived from reported segment revenue, not asserted.

Where it sits

Silicon Layer → Semiconductor Equipment · figures rebased to Q3 2026, reported 2026-10-14

Extreme-UV lithography scanners (NXE/EXE, High-NA) leads 4 businesses in this sub-tier that together are 100% of revenue, so Semiconductor Equipment is effectively the whole company rather than one leg of it.

Reported segments

• EUV lithography systems — 35.2% of revenue
• DUV lithography systems — 34.5% of revenue
• Installed Base Management (service & upgrades) — 28.2% of revenue
• Metrology & Inspection — 2.1% of revenue

ASML (EUR 11.66B Q3 2026, +55% YoY, 57.5% gross margin; FY2026 guided EUR 44-45B at ~56%). Q3 2026 mix: EUV 35.2% (49% of the EUR 8.373B of net system sales, 17 units) = primary B1 Semiconductor Equipment, the leading-edge monopoly; DUV 34.5% (ArFi 39%, KrF 5%, ArF dry 3%, i-line 1% of system sales — immersion units jumped to 40 from 23 as China rose to 23% of system sales); Installed Base Management 28.2% (EUR 3.289B, Q4 guided ~EUR 3.7B); Metrology & Inspection 2.1%. End-use: logic 54% / memory 46% of system sales. Sole supplier of EUV — no AI logic or HBM DRAM node exists without it.

How the 36% is built

• EUV lithography systems — 35.2% of revenue × 60% AI-driven (estimate). Every leading-edge AI logic and HBM DRAM node requires EUV, though the same tools also print non-AI leading-edge silicon
• DUV lithography systems — 34.5% of revenue × 20% AI-driven (estimate). Serves the whole industry including trailing edge; only the immersion layers of advanced nodes are AI-linked, and Q3 2026's immersion jump was led by China mainstream logic
• Installed Base Management (service & upgrades) — 28.2% of revenue × 25% AI-driven (estimate). Service follows the installed base, which is far broader than its leading-edge slice
• Metrology & Inspection — 2.1% of revenue × 30% AI-driven (estimate). Yield control matters most at the advanced nodes where AI silicon is built

Investment read

Moat. Absolute monopoly on EUV lithography — the only company that can make machines for <7nm chips. No competitor exists or is close. The deepest moat in tech.

Bottleneck / pricing power. Ultimate upstream chokepoint — without ASML EUV there is no leading-edge AI silicon. Pricing power now shows as rationing: ASML says supply as currently planned for both 2027 and 2028 will not fully meet customer demand even after the 30% Low-NA EUV and DUV immersion capacity add for 2027, some customers want to place orders for 2029 and 2030, and long-term customer contract liabilities rose to EUR 9.3B from EUR 3.4B at year-end. Gross margin reached 57.5% in Q3 2026.

Role in the AI stack. The tool-of-tools — enables the entire leading-edge silicon layer.

Connected companies

• Taiwan Semiconductor (TSM) — ASML supplies: EUV/DUV lithography systems
• Intel (INTC) — ASML supplies: EUV lithography for 18A
• Samsung Electronics (SSNLF) — ASML supplies: EUV for memory + foundry
• Applied Materials (AMAT) — ASML competes with: Broad WFE peers but largely complementary — litho (ASML) vs deposition/etch (AMAT) are not substitutable; overlap only in WFE budget share and minor e-beam/metrology
• SK Hynix (SKHY) — ASML supplies: EUV/DUV for SK Hynix HBM/DRAM fabs
• KLA Corporation (KLAC) — ASML competes with: overlap only in metrology/e-beam inspection (ASML YieldStar/HMI vs KLA); otherwise complementary litho vs process-control
• GlobalFoundries (GFS) — ASML supplies: DUV lithography systems for GlobalFoundries fabs (GF does not use EUV)
• Micron Technology (MU) — ASML supplies: EUV (plus DUV) lithography for Micron DRAM — Micron discloses EUV insertion at its 1-gamma node, and ASML is the sole EUV supplier; memory was 46% of ASML's Q3 2026 system sales as SK Hynix, Samsung…
• Tower Semiconductor (TSEM) — ASML supplies: DUV lithography systems for Tower's specialty processes (no EUV — Tower is not leading-edge)
• Onto Innovation (ONTO) — ASML competes with: Named as a core rival in ASML's value chain: Competed in laser annealing and advanced packaging lithography segments [Ultratech (Onto Innovation subsidiary)]

Others in Semiconductor Equipment

• Lam Research (LRCX)
• Applied Materials (AMAT)
• KLA Corporation (KLAC)
• Teradyne (TER)
• Onto Innovation (ONTO)
• Ultra Clean Holdings (UCTT)
• Entegris (ENTG)

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