ASML, the Dutch monopoly behind the machines that make every chip

ASML, the monopoly that builds the machines behind every chip

In the race for technological supremacy, there is one name that rarely makes headlines yet weighs more than any chip factory: ASML. This Dutch company is the only manufacturer in the world capable of producing the extreme ultraviolet (EUV) lithography machines that make it possible to etch 2-nanometer circuits. Without them, there are no processors for Nvidia, Intel or Apple. Everything goes through one company in the Netherlands.

The Philips legacy in Eindhoven

How does such a monopoly come about? The answer lies in history. Philips spent more than a century working on semiconductors, imaging and electronics, and ASML emerged from that environment as a spin-off. The Eindhoven ecosystem, with its universities, research centers and funding, provided the perfect breeding ground. It is no coincidence that the city is today a cluster of hyper-technological companies in the sector. Philips itself left behind inventions such as the CD and the cassette, and even a record label together with Siemens. That DNA cannot be improvised.

The critical link in the war with China

If advanced chips are the oil of the 21st century, ASML controls the refinery. EUV machines are so difficult to build that, although there are more than a dozen producers of traditional lithography equipment, only the Dutch have mastered the extreme ultraviolet variety. That dominance carries a geopolitical price. Citing national security, the United States restricts how many machines the Netherlands can sell to China. The military applications are obvious: from missiles to defense systems. The pressure was felt most keenly in the blockade of Huawei's telecommunications division.

Can China close the gap?

China's plan is clear: develop its own EUV lithography. Back in 2019, reports circulated that the machinery had been copied, though never publicly confirmed. The forecast for 2024 was to have several facilities of its own. But the obstacle is not just building the machine; it requires a global supply chain, components that depend on the United States, and an after-sales service that even the Chinese themselves do not trust their own production to deliver. Some recall that ASML is not exactly a model employer either: an engineer who asked for a 120,000-euro raise plus a bonus says the answer was laughter.

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ASML's monopoly looks unassailable, but economic history is full of bottlenecks that eventually got bypassed. China is trying, with varying degrees of success. Meanwhile, the bill for the world's most advanced chips still passes through a corner of the Netherlands.