There is a city in the south of the Netherlands called Veldhoven. Population 45,000. A suburb of Eindhoven. Most Dutch people outside the region would struggle to find it on a map.

A single company based there holds a complete monopoly over the machines needed to manufacture the world's most advanced microchips. Without those machines, producing the chips that power modern AI, smartphones, data centres and defence systems at commercial scale would become far more difficult, expensive and slow. No other company on earth makes anything like them.

The company is ASML. This is what it actually does, why it matters, and what the numbers from its own filings say.

What a chip is, explained simply

To understand ASML, we need to start with the basics. A microchip is a piece of silicon with an electrical circuit printed onto its surface. That circuit processes information, runs calculations, stores data, sends signals. The more transistors packed onto it, the more powerful it is. Transistors are the tiny on/off switches that make the circuit work.

A silicon wafer during chip manufacturing. Each square on the wafer will become a finished microchip. Photo: Macro photo / Shutterstock

The challenge is that modern chips need billions of transistors packed into a space smaller than a fingernail. To manufacture that kind of density, you need to print extraordinarily fine patterns onto silicon with extraordinary precision. The process of printing those patterns is called lithography, from the Greek for stone-writing. The concept is similar to a photographic negative: you shine light through a template of the circuit design and onto the silicon below, and the pattern transfers.

The problem is that finer patterns require shorter wavelengths of light to print them. A thick brush cannot paint a thin line. Standard visible light has wavelengths between roughly 400 and 700 nanometres, too long to resolve the fine detail needed for the most advanced chips. The semiconductor industry has spent decades pushing to shorter and shorter wavelengths, engineering at the edge of what physics allows.

ASML is the company that went furthest.

What ASML actually builds

ASML's most advanced machines use extreme ultraviolet light — EUV — with a wavelength of 13.5 nanometres. That is roughly 30 to 50 times shorter than visible light, depending on which end of the visible spectrum you compare against.

EUV light is absorbed by almost everything. Air absorbs it. Glass absorbs it. Water absorbs it. You cannot direct it with conventional lenses. The entire optical system of an EUV machine must operate inside a vacuum, a chamber from which all air has been removed, and the light must be guided using specially engineered mirrors rather than lenses.

Generating EUV light in the first place requires firing a laser at droplets of molten tin at roughly 50,000 droplets per second. Each droplet is hit twice: once to flatten it, once to vaporise it. The plasma released by the vaporised tin emits EUV light, which is then captured and directed through the mirror system onto the silicon wafer.

The machine that does all of this weighs between 150 and 180 tonnes. Standard EUV systems are priced at roughly $200 to $250 million. The latest High-NA EUV generation — a step up in optical precision — costs upwards of $350 to $400 million per unit, according to Reuters. Each machine requires several Boeing 747 cargo flights to transport, reassembled on-site by ASML engineers.

ASML's machines operate at tolerances that push the limits of what materials science can achieve. Photo: Unsplash

It is worth being clear about what ASML builds and what it does not: ASML manufactures lithography systems. Its customers (TSMC, Samsung, Intel and others), use those systems, alongside many other tools and processes, to manufacture chips. EUV is used for specific critical layers of the most advanced chip designs, not for every single step of production.

Why nobody else can do this

ASML is the only commercial supplier of EUV lithography systems in the world. It has a complete monopoly in EUV. In lithography overall, Nikon and Canon remain meaningful competitors in older deep ultraviolet technology for less advanced chips, but ASML is dominant across the broader market.

This did not happen by accident or luck. It happened because of time.

ASML was founded in 1984 as a joint venture between Philips and the Dutch company ASM International, initially operating from a shed on the Philips campus with 31 employees. It started as a maker of DUV lithography systems, competing with Japanese rivals Nikon and Canon.

The EUV research programme began in the 1990s through collaborations with research institutions, US national laboratories and the broader scientific community. The engineering challenge was considered by many in the industry to be at the outer limits of what was achievable. Nikon and Canon assessed it, calculated the cost and difficulty, and stepped back from pursuing EUV at the same scale as ASML.

The decisive moment of co-investment came in 2012 and 2013, when Intel, TSMC and Samsung invested billions in ASML and supported accelerated development, receiving equity stakes in return. They needed the machine and were prepared to fund the people building it. The first EUV prototype had already been delivered to a research centre in Belgium in 2006. Commercial deployment in chip factories did not begin until 2018, twelve years after the prototype, and roughly three decades after the underlying science first attracted serious research investment.

That timeline is the moat. The knowledge compounded inside ASML across those decades cannot be replicated quickly. The supplier relationships, the optical engineering, the calibration expertise, the manufacturing processes, all of it accumulated in one company in one city in the Netherlands.

The numbers from ASML's own filings

ASML reported total net sales of €32.7 billion in 2025, with a gross margin of 52.8% and net income of €9.6 billion. These are figures from ASML's full year 2025 results, published January 28, 2026.

The backlog at the end of 2025 stood at €38.8 billion — representing authorized orders placed by customers that had not yet been recognized as revenue. That figure represents more than a full year of revenue sitting in committed orders. Q4 2025 alone recorded a record €13.2 billion in net bookings, of which €7.4 billion was for EUV systems.

ASML spent €4.7 billion on research and development in 2025 — roughly 14% of its total revenue — a number that reflects a company still investing aggressively in staying ahead of the physics, not one sitting on a finished product.

The workforce numbers come from ASML's 2025 Tax Report, published this year. ASML employs 44,209 people globally across more than 60 locations in 143 nationalities. Of those, 23,546 — 53% of the entire global workforce — are based in the Netherlands. The Netherlands accounts for 70% of all ASML R&D employees and 95% of all ASML patents. The company owns 18,360 patents in total.

On tax, ASML publishes one of the most detailed tax reports of any European company. In 2025, ASML paid €1,656 million in income tax globally, of which €1,153 million went to the Netherlands alone. The company's total tax contribution across all tax types — including income tax, VAT, wage tax, dividend withholding tax and customs duties — was €2,795 million in 2025.

The dependency nobody talks about

ASML holds a monopoly. But ASML itself depends on a separate monopoly.

The mirrors inside an EUV machine must be polished to extraordinary surface precision, then coated with alternating layers of silicon and molybdenum, each layer just a few atoms thick. The widely cited illustration, that if you scaled a mirror to the size of Germany, its surface variation would be less than one centimetre across the entire country — comes from ASML and Zeiss communications and gives some sense of the engineering involved.

These mirrors are made by Carl Zeiss SMT, the semiconductor optics division of the German company Zeiss, based in Oberkochen. ASML acquired a 24.9% indirect stake in Carl Zeiss SMT in 2016, cementing the partnership formally. Zeiss is a large optics company with other products and customers, but its EUV optical systems for ASML represent a unique collaboration that no other company replicates.

The dependency chain runs: the most advanced AI systems, smartphones and data centre processors require leading-edge chips, which require EUV lithography, which requires ASML's machines, which require Zeiss optical systems. Each link in that chain is effectively a single source. Removing any one of them would create serious disruption to advanced chip production. Not an instant halt, since existing installed machines would continue operating for some time, but a deepening constraint with no near-term replacement.

What the Netherlands gets from all of this

The Netherlands — a country of 18 million people that controls the most critical chokepoint in global chip manufacturing. Photo: Unsplash

Between 2016 and 2025, ASML's workforce grew from around 16,500 to more than 44,000 globally, with over 23,500 based in the Netherlands, the majority working in R&D.

That growth has transformed the Brainport Eindhoven region. Around ASML has grown an ecosystem of hundreds of suppliers, specialist engineering firms, software companies and logistics operations. Schools, housing projects, infrastructure — all of it has been shaped by the presence of one company in Veldhoven. ASML's own 2025 Tax Report notes ongoing work to support housing in the Brainport region, acknowledging the pressure its growth has placed on local communities.

In 2025, ASML paid €1,153 million in income tax to the Netherlands, contributed €1,005 million in wage tax to the Dutch government, and €5 million in customs duties, part of a total Netherlands tax contribution of approximately €1,452 million across all tax categories.

The geopolitics: how a company becomes a tool of state

ASML sits at the centre of one of the most consequential geopolitical contests of the current era. Photo: Unsplash

In 2019, the first Trump administration contacted the Dutch government with a request: deny ASML's export licence for EUV machines to China. The Dutch government complied.

ASML had already never delivered an EUV system to China, and the export control regime formalized that position. From 2023 and 2024 onwards, Dutch and US export restrictions progressively tightened on specific advanced DUV models as well, covering particular system models such as the NXT:1970i, NXT:1980i, NXT:2000i and later, rather than a blanket ban on all DUV exports.

The commercial impact has been significant. China was ASML's largest market by net sales in 2025, but primarily through DUV machines and services for less advanced chips. China is expected to contribute around 20% of ASML's net sales in 2026, a notable decline from the roughly 29% share seen in 2024, when Chinese customers purchased DUV machines in large volumes ahead of further restrictions.

The situation became more complicated in 2026. Media reports, including Bloomberg, indicated that US Commerce Secretary Howard Lutnick questioned ASML executives in private meetings beginning in April 2026 about whether one of ASML's EUV systems may have ended up in China in breach of export restrictions. ASML has firmly denied ever shipping an EUV system to China or violating export controls. The allegation remains unresolved and has not been independently confirmed by ASML, the Dutch government or the US Commerce Department.

ASML's position on the broader geopolitics has been consistent: the company cannot itself determine which customers should be subject to export controls. That is the responsibility of governments. It is a position with limited alternatives available to a company that finds itself at the centre of a major power contest not of its own choosing.

What AI means for the business

The AI infrastructure buildout of the past several years has been the primary driver of demand for ASML's most advanced systems. The semiconductor industry is projected to surpass $1 trillion in annual revenue by 2030, driven by AI adoption across an expanding range of applications, according to ASML's investor communications. Every data centre being built to run AI requires chips. The more powerful the chip, the more it relies on EUV lithography.

ASML's company target is annual revenue of between €44 billion and €60 billion by 2030, with a gross margin between approximately 56% and 60%, figures ASML presented at its 2024 Investor Day as scenarios based on different market and lithography intensity assumptions. They are the company's own projections, not independent analyst forecasts.

For 2026, ASML expects total net sales of between €43-45 billion.

ASML is also deploying its next generation. High-NA EUV machines — a step up in optical precision that enables finer chip features, have begun shipping to customers. As of Q4 2025, two High-NA systems had been recognized in ASML's EUV sales for that quarter. On July 15, 2026, ASML announced that High-NA EUV had reached a new readiness milestone, with its first high-volume Logic product confirmed. Broad high-volume commercial production using High-NA is still in its early stages, with adoption progressing on a customer- and process-specific basis.

Where things stand

ASML is, by market capitalisation, Europe's most valuable public company. It operates in a suburb most people have never heard of. It employs 44,000 people, pays €2.8 billion in taxes globally per year, holds 18,360 patents, 95% registered in the Netherlands, and manufactures a machine no other company in the world can build.

The reason it matters is not that everything stops without it. Existing machines continue to operate. Some chips can be made through other processes. The world does not switch off.

The reason it matters is that without ASML's EUV systems, producing many of the world's most advanced chips at economically viable scale becomes far harder. The AI processors, the high-end smartphone chips, the memory chips running data centres, all of these depend on EUV. And EUV depends on one company in Veldhoven.

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