ASML’s extreme ultraviolet lithography machines are a crucial part of the supply chain for advanced chips, and each reportedly costs about $400 million. A detailed account of the technology also shows why expanding chip capacity is a long, complicated business, not a tap that can simply be turned on.
ASML Watch analysis
What happened
Michael Parekh’s 1 October newsletter examines a Financial Times profile of ASML chief executive Christophe Fouquet, published on 28 September, and explains how the Dutch company’s EUV machines help chipmakers print increasingly fine circuit patterns. Parekh’s account says a machine is roughly the size of a double-decker bus and uses more than 100,000 parts, drawing on a supply chain involving about 2,000 companies. Read Parekh’s account.
The newsletter describes EUV’s 13.5-nanometre wavelength and the process behind it: lasers turn droplets of molten tin into plasma that emits the light, which is directed by precision mirrors in a vacuum. Parekh also discusses ASML’s next-generation High-NA EUV machines and cites commitments by TSMC and Samsung, alongside Intel’s earlier deliveries.
Why it matters
AI systems run on chips, and advanced chipmaking depends on specialised equipment as well as the chip designers and manufacturers that attract more familiar headlines. Parekh’s account makes the bottleneck tangible: if the equipment takes a vast network of specialist suppliers to build, adding production capacity is not just a matter of ordering more machines.
That matters as demand for AI computing grows. It also helps explain why export restrictions and efforts to build competing chipmaking capabilities are part of the wider technology contest. The newsletter attributes a warning to Fouquet that excessive restrictions could encourage China to accelerate its own development; that is his assessment, not a demonstrated forecast.
Our read
The useful takeaway is less “one company makes the whole AI stack” than “one company makes a particularly difficult piece of it”. Parekh’s account is a readable guide to the machinery behind chip production, while its broader claims about supply and geopolitics deserve to be treated as analysis, not a set of settled measurements. Chips may be digital; the supply chain is gloriously, stubbornly physical.
What to watch
- Whether TSMC, Samsung and Intel deploy High-NA EUV on the schedules described in Parekh’s account.
- How quickly ASML and its suppliers can expand production capacity.
- Whether export controls change the pace or direction of China’s domestic chipmaking efforts.
Discussion spark: Should governments restrict access to advanced chipmaking technology even if those limits may accelerate efforts to build competing domestic capabilities?
Sources and evidence
- AI: ASML, the $400 Million Machine behind every AI Chip. AI-RTZ 1226 – AI: Reset to Zero (1 October 2026, 05:03 UTC)
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