ASML Holding N.V.
ASML Holding N.V. provides lithography solutions for the development, production, marketing, sales, upgrading, and servicing of advanced semiconductor equipment systems. The company offers lithography, metrology, and inspection systems. It also provides extreme ultraviolet lithography systems; and deep ultraviolet lithography systems comprising immersion and dry lithography systems solutions to manufacture various range of semiconductor nodes and technologies. In addition, the company offers metrology and inspection systems, including YieldStar optical metrology systems, a diffraction-based wafer metrology platform to assess the quality of patterns on the wafers; and HMI electron beam solutions to locate and analyze individual chip defects. Further, it provides computational lithography solutions, and lithography systems and control software solutions; and refurbishes and upgrades lithography systems, as well as offers customer support and related services. Additionally, the company offers hardware, software, and services to chipmakers to produce the patterns of integrated circuits. It operates in Japan, South Korea, Singapore, Taiwan, China, rest of Asia, the Netherlands, rest of Europe, the Middle East, Africa, and the United States. The company was formerly known as ASM Lithography Holding N.V. and changed its name to ASML Holding N.V. in 2001. ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands.
What does it do?
ASML makes the machines that manufacture computer chips. Think of it like this: if a chip factory is a bakery, ASML sells the ovens. Specifically, they build lithography systems—sophisticated equipment that uses light (or extreme ultraviolet light) to etch patterns onto silicon wafers, creating the billions of transistors inside your phone, laptop, or data center. Without ASML's machines, modern semiconductors simply cannot be made.
ASML is a bottleneck in the global semiconductor supply chain. Every major chipmaker—TSMC, Samsung, Intel—depends almost entirely on ASML equipment to produce cutting-edge chips. This means ASML has enormous pricing power and captures a massive share of semiconductor industry profits without bearing manufacturing risk. Right now, with AI driving explosive demand for chips, ASML is the gatekeeper deciding who can scale production.
How does it make money?
ASML generates revenue primarily by selling lithography systems (the core machines) to semiconductor manufacturers, with annual sales of $32.7B, up 16% from $28.3B the prior year. They also make money from service contracts, upgrades, and metrology/inspection equipment that complements their main systems. Each system costs tens to hundreds of millions of dollars, so a single order can represent significant revenue. Their net income of $9.4B shows they convert roughly 29% of revenue into profit—an exceptionally high margin because they have limited competition and customers must buy their products.
Why do investors care?
Investors are attracted to ASML because it's a pure-play bet on semiconductor demand without cyclical manufacturing exposure. The AI boom is driving unprecedented chip spending—data centers, AI chips, and advanced consumer electronics all need the latest nodes (smaller, faster, more powerful chips), which only ASML's equipment can produce. The company grows revenue while improving margins because demand outpaces supply, and there's no viable competitor that can displace them in the near term.
Deep Dive
MemberA full investor briefing on ASML Holding N.V. — history, leadership, risks, and outlook.