Leveraging its monopoly in extreme ultraviolet (EUV) lithography technology, the Dutch company ASML is becoming a key equipment supplier in the artificial intelligence wave. Now, this industry giant is not resting on its laurels; it is ambitiously planning to expand its product line into multiple new areas to capture a larger share of the rapidly growing AI chip market.
After more than a decade of research and development, ASML is the world’s sole manufacturer of EUV lithography equipment. This equipment is crucial for TSMC and Intel to manufacture the most advanced AI chips. Having invested billions of dollars to develop the EUV system and with a next-generation product on the horizon, ASML is already researching potential third-generation lithography technologies. “We are not only looking at the next five years, but also the next ten, even fifteen years, focusing on where the industry might be heading,” said ASML’s Chief Technology Officer, Marco Peters.
The Dutch company is seeking growth beyond its EUV foundation and plans to enter the market for tools that help bond and connect multiple specialized chips—the field of advanced packaging. This is a critical step in manufacturing AI chips and the advanced memory they require. Peters explained that the company is studying to what extent it can participate in this area and add value. He observed that the plans of chip manufacturers (including memory makers like SK Hynix) are increasingly clarifying the need for additional equipment.
In the past, chip design was essentially flat, like a single-story house. Today, however, chips are increasingly evolving into structures resembling skyscrapers, stacking multiple layers vertically or splicing them horizontally using nanometer-scale connections. This overcomes the size limitations of traditional postage-stamp-sized chips, thereby increasing the speed at which complex calculations are processed. This complexity is transforming packaging, once a relatively low-margin business, into a higher-profit segment of the manufacturing process. TSMC is already using such advanced technologies to manufacture AI chips for NVIDIA. Peters pointed out that more advanced packaging is moving into the front-end manufacturing process, with ever-increasing demands for precision.
ASML is accelerating its plans to manufacture equipment for packaging chips and to develop chip-making tools that can help build next-generation advanced AI processors. Last year, the company disclosed a new inspection tool called the XT:260, specifically designed to aid in manufacturing the advanced memory chips and processors essential for AI. Peters revealed that company engineers are simultaneously exploring more equipment and studying potential product portfolios in this direction.
As the size of AI chips increases significantly, ASML is also researching more scanning systems and lithography tools to make chips larger. Peters believes that the company’s deep accumulation of optical expertise and complex wafer processing technology will give it an advantage in future equipment manufacturing, “which will coexist with the work we’ve done over the past 40 years.”
Currently, the company, with a market value of approximately $560 billion, has a price-to-earnings ratio of about 40. Its stock price has risen more than 30% this year.
