This article first appeared on GuruFocus.
ASML Holding NV (ASML, Financials) already sells some of the most important machines in the semiconductor industry. Its next generation is starting to find customers.
TSMC, Samsung and Intel are moving toward ASML’s High-NA extreme ultraviolet technology, which can print smaller and more complex features on advanced chips. That matters because AI processors are getting harder to build.
Nvidia, Google and other companies are designing increasingly large data-center chips. ASML is now working on changes that would allow its newest machines to handle those larger designs without giving up the finer resolution High-NA provides.
Intel is furthest along.The company is already using High-NA EUV for certain layers of chips produced on its 18A process.
TSMC is expected to bring the technology into production later in the decade, while Samsung is also preparing for wider adoption. For ASML, this is important for a simple reason. Its customers do not have many alternatives.
As chipmakers push toward smaller transistors and more complicated AI processors, the lithography step becomes increasingly difficult. ASML is the only company supplying EUV systems at commercial scale.
That puts it in an unusual position. The AI boom may begin with Nvidia GPUs and huge data centers, but making those chips increasingly depends on machines that ASML alone can build.
The next thing to watch is how quickly TSMC and Samsung move High-NA EUV from testing into high-volume production.
