asml's lithography lock: can anyone break the chain?

2025-03-17 asml

Veldhoven, Monday, 17 March 2025.
asml’s dominance in lithography is critical for tech giants like apple and nvidia. the dutch company reported €7 billion in orders. but can asml’s control be challenged? china’s smic is pushing ahead with domestic lithography. the us and netherlands are placing export controls. asml’s euv machines remain off-limits to china. one chinese company, northern hwa create, is attempting to enter the lithography market. global semiconductor sales are projected to reach $1 trillion by 2030.

asml’s market stronghold

ASML, headquartered in Veldhoven, Netherlands, holds a near-monopoly on extreme ultraviolet lithography (EUVL) machines [1]. The company employs 44,000 people across the globe [1]. ASML’s lithography technology is essential for producing advanced chips found in devices from Apple iPhones to Nvidia AI accelerators [1]. ASML’s financial performance reflects its market position, with sales in 2024 reaching €28 billion ($30.5 billion) [1]. The company also reported a gross margin of 51% and a net income of €7.6 billion ($8.3 billion) [1].

export controls and china’s response

The U.S. and the Netherlands have imposed export controls on semiconductor parts to hinder China’s industry [1]. The most recent restrictions were tightened by Dutch authorities in September 2024 and U.S. officials in December 2024 [1]. ASML has never been permitted to sell its EUV lithography machines to China [1]. China’s revenue from ASML increased to €9 billion ($9.8 billion) in 2024, up from €6.4 billion ($6.9 billion) in 2023 [1]. In response to these restrictions, China has expressed its discontent [1].

china’s domestic efforts

China is actively pursuing the development of domestic lithography capabilities [2][3]. Two homegrown deep ultraviolet (DUV) lithography machines were promoted by the Chinese government in September 2024 [1]. Shanghai Micro Electronics Equipment is at the forefront of China’s efforts to create domestic DUV and EUV lithography machines [1]. Another Chinese company, Northern Huachuang, is expanding into the lithography market by acquiring a 9.49% stake in Sinyuan Micro for 1.687 billion yuan [2][3]. Sinyuan Micro specializes in semiconductor lithography equipment [2][3].

financial implications for asml

ASML’s stock has experienced volatility, with shares down 26% in the last 12 months [1]. In October, ASML’s shares fell 16% after third-quarter financial results revealed booked orders were less than half of analyst expectations [1]. Despite these fluctuations, ASML maintains a price/earnings-to-growth ratio of 1.5, compared to an average of 2.1 [1]. ASML anticipates that sales will fall within its 2025 forecast [1]. The company’s CEO, Christophe Fouquet, believes that lower AI costs could increase chip demand, presenting an opportunity for ASML [1].

duv lithography market growth

The deep ultraviolet (DUV) lithography system market is poised for substantial growth [7]. The market is projected to increase from $3.39 billion in 2023 to $6.7 billion by 2032 [7]. This represents a compound annual growth rate (CAGR) of approximately 7.88% from 2024 to 2032 [7]. Semiconductor manufacturing within the DUV lithography system market is expected to reach $3.9 billion by 2032, up from $2 billion in 2023 [7]. North America is anticipated to hold the largest market share, reaching $2.48 billion by 2032 [7].

Bronnen

ASML Lithography Chip Manufacturing