👉 Breaking Down ASML Holding ($ASML)

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Happy Friday.

We’re thrilled to share a comprehensive breakdown of a stock that’s quietly up +76% over the past year.

As a reminder, this specific deep-dive is written by the GRIT team and is not the exclusive work of Head Analyst Austin Hankwitz.

Stock Deep Dive: ASML Holding NV (ASML-US, $394B MCAP)

Everyone is arguing about the AI chip winners.

Nvidia’s ecosystem. AMD’s catch-up. Broadcom’s custom silicon flywheel. Hyperscalers rolling their own accelerators.

But there’s a quieter truth underneath all of it.

No matter who wins the benchmark wars, the chips still have to get manufactured, and at the cutting edge there is one gatekeeper: ASML.

This is the company that sells the lithography systems that “print” the most advanced transistors on earth. These machines are so complex they are effectively industrial miracles, so scarce they dictate fab buildout timelines, and so essential that governments treat them like strategic assets. Extreme Ultraviolet (EUV) is the entry ticket to 3 nm and 2 nm, and ASML controls the supply.

So while headlines bounce between GPU launches and custom silicon roadmaps, ASML keeps collecting a toll on progress.

If you want exposure to AI’s hardware arms race without having to pick the chip designer that wins, this is the rare picks-and-shovels story that still matters.

• Why now? 👉 Integrating with AI Interfaces

• Overview 👉 What Does ASML Do?

• Role in Ecosystem 👉 ASML and the Semiconductor Arms Race

• How Do They Win? 👉 Unrivaled Value in Lithography

• Bonus 👉 High-NA EUV, The Next Frontier

• Business Units 👉 Segment Breakdown

• By The Numbers 👉 Key Metrics

• Competition and Outlook 👉 Strategic Positioning in a Shifting Landscape

• Risks 👉 Potential Pitfalls

Why now? 👉 Integrating with AI Interfaces

AI is pushing the semiconductor industry into a new capex cycle, and ASML sits at the choke point. It does not design GPUs or custom accelerators. It sells the lithography systems that every leading-edge foundry needs to manufacture them. As Nvidia, AMD, Broadcom, and hyperscaler custom silicon teams fight for performance, they all converge on the same bottleneck: advanced process nodes require EUV, and ASML is the only scaled EUV supplier. That makes ASML a picks-and-shovels way to play AI compute demand without betting on which chip architect wins the next benchmark.

The timing also matters. Foundry roadmaps are moving from 3 nm toward 2 nm, and the next wave of tool intensity is ramping as High-NA EUV transitions from prototype to early production. Add in the reshuffling of supply chains away from single-region risk, and you have a setup where ASML’s backlog visibility, pricing power, and service annuity can compound through the cycle.

Overview 👉 What Does ASML Do?

ASML is the world’s most important photolithography company. Lithography is the step that “prints” microscopic circuit patterns onto silicon wafers, setting the ceiling on transistor density, power efficiency, and ultimately chip performance. ASML’s flagship tools are EUV scanners that use 13.5 nm light to pattern the smallest features used in advanced logic and increasingly in memory. These machines are factory-scale systems, often weighing over 180 tons, assembled from hundreds of thousands of parts, and sold at prices that can reach roughly $320M for top-end EUV.

ASML also sells DUV lithography tools, which remain essential for many layers even in leading-edge fabs and dominate mature-node manufacturing. The key point is simple: if you want to make cutting-edge chips at scale, you need ASML in your fab. That dependence is why ASML is both a commercial powerhouse and a strategic asset in global tech policy.

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Role in Ecosystem 👉 ASML and the Semiconductor Arms Race

ASML sits at the center of the semiconductor arms race because lithography is the gate that determines who can manufacture at the frontier. That is why export controls matter. Since 2019, ASML has been blocked from shipping EUV systems to China, and more recent rules tightened access to certain advanced DUV tools. Governments see these machines as strategically decisive because they enable the production of leading-edge logic chips.

China’s role is both opportunity and risk. In 2024, Chinese fabs pulled forward purchases, pushing China to about 36% of ASML sales. With tighter controls, ASML expects China’s revenue share to fall toward about 20% in 2025. That is a revenue headwind, but it is also proof of how irreplaceable ASML tools are.

Across the rest of the ecosystem, the dependency is universal. When TSMC, Intel, or Samsung plans 3 nm or 2 nm capacity, EUV allocation is a first-order constraint. Chip designers can shift architectures, but they cannot route around lithography.

How Do They Win? 👉 Unrivaled Value in Lithography

ASML wins because it owns the hardest bottleneck in semiconductors and has spent decades widening that lead. First, technology. EUV took decades of development and roughly $6B of R&D investment to industrialize, and ASML is still reinvesting about $6B per year to extend performance and yield. Second, barriers. EUV depends on a specialized supply chain, including ultra-precision optics that require capabilities built alongside partners like Zeiss. The result is an engineering stack that is extremely difficult to replicate, even with state-backed funding.

Third, customer lock-in. ASML tools are not “install and forget.” They require continuous calibration, upgrades, and service, and fabs optimize entire process flows around these scanners. Fourth, value creation. A single EUV tool can unlock billions of dollars of high-end chip output, so customers focus on throughput, uptime, and roadmap alignment more than sticker price.

In a market where chip designers compete fiercely, ASML’s advantage is that it sells the enabling infrastructure to all of them, and it moves the goalposts with each generation.

Bonus 👉 High-NA EUV, The Next Frontier

High-NA EUV is ASML’s next leap and the clearest reason its moat can deepen from here. “NA” refers to numerical aperture, essentially the optical capability that improves resolution. High-NA EUV is designed to pattern smaller features more efficiently, supporting 2 nm and beyond while reducing the need for some costly multi-patterning. ASML has already shipped early High-NA modules to customers, with Intel positioned as a key early adopter, and broader deployment expected as the decade progresses.

The economics matter. High-NA tools are expected to be even more expensive than current EUV, with pricing discussed around $400M per system for leading models. That higher ASP raises ASML’s revenue potential per fab buildout. The strategic impact is just as important. High-NA reinforces that the frontier keeps advancing, and ASML remains the sole practical supplier of that advancement.

There are execution risks, including early-cycle margin pressure and integration complexity, but the long-term setup is compelling. If High-NA becomes the late-decade workhorse, ASML’s pricing power and service annuity expand with it.

Business Units 👉 Segment Breakdown

ASML’s business splits cleanly into two engines: new system sales and the installed-base annuity.

1. Lithography system sales. This includes EUV for leading-edge logic and growing memory adoption, plus DUV tools that remain essential across both advanced and mature nodes. EUV units are fewer, but ASPs are far higher, so EUV increasingly drives revenue and sentiment. DUV remains structurally important because even the most advanced chips still use DUV for multiple layers, and mature-node demand is persistent across automotive, industrial, and consumer electronics.

2. Installed Base Management. After a tool is shipped, ASML earns high-margin revenue from service contracts, spare parts, productivity upgrades, and refurbishments over a machine life that can span 20 to 30 years. This is the stabilizer in the model. In the first 9 months of 2025, services were about $6.4B, up 39% YoY, roughly 26% of sales.

Net, system sales deliver upside torque in upcycles, and services provide resilience and compounding through the full cycle.

By The Numbers 👉 Key Metrics

Q3 2025 performance (reported October 15, 2025):

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