One Dutch company owns the single most important machine in modern technology. According to MIT Tech Review, ASML is the only firm on earth that builds the extreme ultraviolet (EUV) lithography machines used to print the world’s most advanced chips, and those machines run around $400 million each. Pair that with TSMC, the Taiwanese giant that uses ASML’s gear to make most of the planet’s microchips, and you get a duopoly so concentrated it has become a national security problem.
What stands out here is how quickly “chips are the new oil” went from a slogan to policy. MIT Tech Review quotes Marc Hijink, author of Focus: The ASML Way, with exactly that line, and the comparison is doing real work. In 2019 the US pressured the Dutch government to block ASML from selling its high-end machines to any Chinese firm. Cut off a country’s chip supply and you can cripple its AI ambitions the same way an oil embargo once crippled economies.
📍 Why the chokepoint is so fragile
The whole system rests on physics that took ASML two decades to master. Chipmaking works a bit like silk-screening a T-shirt: light shines through a patterned mask onto a silicon wafer, and the smaller the light’s wavelength, the smaller the circuitry you can print. The industry kept shrinking that wavelength, from visible light down to deep ultraviolet at 193 nanometers, until it hit a wall.
Around 2001 ASML bet on EUV, a wavelength just shy of x-rays. Nobody knew how to reliably generate it or focus it, since EUV is absorbed by glass lenses and even by air. Nikon and Canon worked on it too, then dropped out. ASML kept going. As SemiAnalysis analyst Jeff Koch puts it in the piece, the company’s approach was to “send thousands of engineers and just have them mow down these problems. That’s what they did, and it worked.”
That brute-force engineering is exactly why no one has caught up. It’s also why the supply chain is so concentrated and so expensive.
📍 The challengers stepping up
Two forces are now pushing against ASML’s wall:
- China is pouring billions into replicating EUV technology from scratch, motivated heavily by the US embargo.
- Startups like Substrate, cofounded by CEO James Proud, are chasing lithography machines that are cheaper, smaller, and potentially more capable. Proud argues the US is “dangerously reliant” on an overseas supply chain, telling MIT Tech Review there’s “a huge concentration in a small number of players. And the supply chain is just very expensive.”
The honest read: the near future still belongs to ASML. A 20-year head start backed by thousands of specialized engineers is not something a startup erases in a product cycle. But monopolies in deep tech tend to crack on a new physical trick, not on more money thrown at the old method.
📍 What it means for the next 1 to 3 years
Expect the chip chokepoint to stay tight through at least 2027, which keeps AI compute pricing and availability hostage to a handful of suppliers and one geopolitical flashpoint in Taiwan. The interesting move is governments treating domestic lithography as strategic infrastructure, which means startup funding and national subsidies will keep flowing even where the technical odds look long.
For practitioners and businesses, a few takeaways:
- If your roadmap depends on the latest chips, treat supply as a geopolitical variable, not just a procurement one. Build slack into your timelines.
- Watch the lithography startups and China’s progress as leading indicators. A credible EUV alternative would reshape compute costs across the entire AI stack.
- Don’t bet on ASML being unseated soon, but do plan for a world where it eventually is. Concentration this extreme invites both regulation and competition.
The giant still rules the light. The question worth tracking is who finds the next trick of it. You can read the full breakdown at MIT Tech Review.