ASML: What the Company Does and How It Makes Money

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ASML (ASML Holding N.V.) is a Dutch company headquartered in Veldhoven, the Netherlands, that designs and builds the lithography machines chipmakers use to print circuit patterns onto silicon wafers. It does not make chips itself. It sells the equipment that makes chip production possible, and it is the only company in the world producing extreme ultraviolet (EUV) lithography systems, the tools required for the most advanced processors and memory. ASML earns its money in two ways: selling those systems, and servicing, upgrading and supporting the large fleet of machines already installed in customer factories.

What ASML makes

Lithography is the chipmaking step where light is projected through a patterned mask (reticle) onto a wafer coated with light-sensitive material, printing one layer of circuitry. A modern chip needs many precisely aligned layers, and the shorter the wavelength of light, the smaller the features a machine can print.

EUV lithography machines

ASML’s EUV systems use light with a wavelength of 13.5 nanometers, far shorter than earlier tools. Inside the machine, a high-power laser strikes tiny droplets of molten tin, turning them into a plasma that emits EUV light. Because EUV is absorbed by almost everything, including air and glass, the beam travels in a vacuum and is steered by ultra-precise mirrors instead of lenses.

These machines are what the leading chipmakers use for the smallest features on cutting-edge logic chips and advanced memory. They are among the largest and most expensive tools in a chip factory, and they ship in multiple freight containers before being assembled at the customer’s site.

The next generation is High-NA EUV, sold under the EXE platform name. A higher numerical aperture (NA) lets the optics resolve finer detail. ASML delivered the first High-NA system to a customer at the end of 2023; Intel completed installation and began calibrating the first commercial High-NA system in 2024, and ASML recognized revenue for two High-NA systems in the fourth quarter of 2025. How quickly High-NA spreads into volume production depends on customer roadmaps and on cost, throughput and yield.

DUV lithography machines

Deep ultraviolet systems use longer wavelengths (248 nm and 193 nm light sources) and remain the workhorses of the industry. Most layers of most chips, including many layers on advanced chips, are still printed with DUV. ASML’s DUV range includes dry systems and immersion systems, which place a layer of water between the lens and the wafer to sharpen resolution. DUV is also the segment where ASML faces competitors and where export-control debates have increasingly focused.

Metrology, inspection and software

ASML also sells tools that measure and inspect wafers, including optical metrology and electron-beam inspection, plus computational lithography software that models how patterns will print and corrects masks accordingly. These products help customers raise yield, the share of chips on a wafer that work. ASML also provides training for the engineers who run its systems.

How the machines are built

ASML designs and integrates its systems but relies on a specialized supplier network for key modules. Carl Zeiss in Germany produces the mirrors and optics, and Trumpf supplies the high-power lasers used to generate EUV light. ASML strengthened its control over critical components through acquisitions, including light-source maker Cymer in 2013, e-beam inspection specialist Hermes Microvision (HMI) in 2016 and optical components maker Berliner Glas in 2020.

Final assembly and testing take place largely at ASML’s Veldhoven campus, with other sites in the United States and Asia. This supply chain, with optics, light sources, vacuum systems and motion control that took ASML and its partners decades to bring to production, is a large part of why no rival has produced a commercial EUV tool.

History

ASML began in 1984 when Philips and ASM International combined their lithography efforts into a joint venture called ASM Lithography. Its full legal name today is ASML Holding N.V.

The company went public in 1995, listing in Amsterdam and on Nasdaq. Through the 1990s and 2000s it gained share in DUV lithography against Japanese rivals Nikon and Canon, helped by innovations such as dual-stage systems that measure one wafer while exposing another and by early leadership in immersion lithography.

EUV was a long and expensive bet. Research ran for well over a decade, and in 2012 Intel, TSMC and Samsung took equity stakes in ASML and funded EUV development through a customer co-investment program. EUV systems reached high-volume chip production in the late 2010s, and since then ASML has been the only source of the technology.

Peter Wennink stepped down as CEO in 2024 and was succeeded by Christophe Fouquet, who has pointed to demand tied to artificial intelligence and to simplifying the organization so engineers can spend more time on innovation.

Business model

ASML’s customers are chipmakers that build and run fabrication plants (fabs). When a customer adds capacity or moves to a new manufacturing process, it orders lithography systems, often years ahead. Once a machine is installed, it runs for many years and needs service, parts and performance upgrades throughout its life. That gives ASML both a large, cyclical equipment business and a steadier recurring one.

Revenue segments

ASML reports its sales in two main categories:

1. Net system sales. Revenue from new and used lithography systems, plus metrology and inspection tools. ASML also breaks system sales down by technology (EUV, DUV immersion, dry DUV) and by end market (logic versus memory). EUV systems carry the highest prices per unit, so the mix of EUV shipments in a given period has an outsized effect on revenue.
2. Installed base management. Revenue from servicing the machines already in the field: maintenance, spare parts, field upgrades that raise throughput or accuracy, and related software. Because the installed base grows every year, this business tends to be less sensitive to swings in new orders than system sales are.

Orders that have been booked but not yet shipped form the backlog. ASML ended 2025 with a backlog of €38.8 billion, which gives a view of system revenue already contracted for coming periods. Timing still matters: shipments can shift if customers delay fab projects.

Customers

A small number of companies have the scale and technical needs to buy ASML’s most advanced tools. Its largest customers include Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung Electronics and Intel, along with major memory makers. Because revenue is concentrated among these few buyers, a spending pause by one of them can move ASML’s results.

China has also been a large market, mainly for DUV systems, because EUV tools have long been blocked from sale there. Reuters reported that ASML expected China to account for about 20% of 2026 sales, down from about 33% in 2025.

Financial results

For full-year 2025, ASML reported:

• Total net sales of €32.7 billion
• Gross margin of 52.8%
• Net income of €9.6 billion
• Research and development spending of €4.7 billion

A gross margin above 50% is high for an equipment maker and reflects ASML’s pricing power in EUV, where customers have no alternative supplier. The R&D spending is the cost of keeping that position.

Returning cash to shareholders

ASML pays a dividend in quarterly installments and buys back its own shares. In 2025 it returned €8.5 billion to shareholders through dividends and buybacks. Shareholders approved a total dividend of €7.50 per ordinary share for 2025, up 17% from 2024. In January 2026 ASML announced a share buyback program of up to €12 billion running from 2026 to 2028, with most repurchased shares expected to be canceled, which reduces the share count over time.

Major shareholders

ASML is widely held by institutional investors rather than controlled by a founder or parent company. According to ASML’s shareholder disclosure dated February 18, 2026, BlackRock Inc. was the largest reported major shareholder with 6.83% of the shares, followed by Capital Research and Management Company with 5.09%. Both are asset managers holding shares on behalf of their funds and clients.

Risks to the business

Export controls. The United States and the Netherlands have restricted sales of advanced chipmaking equipment to China. EUV has long been off-limits, and the debate has moved toward advanced DUV immersion systems, software, metrology, servicing and spare parts. The Netherlands expanded its export controls on advanced semiconductor manufacturing equipment effective April 1, 2025, and in April 2026 U.S. lawmakers introduced proposed legislation that could further restrict sales and servicing of chipmaking equipment to China. Its effect would depend on whether it is enacted and how closely allied governments follow. Limits on servicing would touch the installed base business as well as new sales.

The equipment cycle. Chipmakers spend heavily when demand is strong and cut back in downturns. ASML’s recent strength has been driven by investment in capacity for AI accelerators, advanced logic and high-bandwidth memory. If that investment slows, system orders follow.

Competitors and the EUV monopoly

No other company sells EUV systems. Nikon and Canon make DUV and other less advanced lithography tools, and China’s SMEE is developing domestic lithography equipment, but none match ASML’s EUV position, which also rests on its patents and on the installed base of machines customers have built their processes around.

FAQs

The Bottom Line

ASML matters to investors watching chipmaking capacity, because the most advanced processors and memory depend on its EUV tools and its installed base generates recurring service revenue. Its results still track the spending plans of a few large chipmakers and the wider equipment cycle. Export controls on sales and servicing to China remain the main policy risk to both new system sales and installed base revenue.