ASML, the largest company in Europe by market cap (approx. EUR 580bn), has been one of the most important players in the chips and semiconductors industry, producing machines that allow for cutting-edge semiconductor production on silicon wafers, the most important material in chip production. While we often hear about American and Asian companies dominating the tech space, a lot of this advantage would not be possible without ASML and its machines. In this blog, we bring you a detailed overview of the Company.
First, a little bit of context. ASML is a Dutch semiconductor equipment manufacturer, established in 1984, but unlike companies such as Nvidia, AMD, or Intel, it does not design or manufacture chips itself. Instead, the Company builds the machines that semiconductor manufacturers use to produce them. Its core technology is lithography, a process of projecting extremely small patterns onto silicon wafers, which are then gradually turned into the transistors and electrical connections that make up a semiconductor.
As such, the Company’s portfolio is centred around Deep Ultraviolet (DUV) and Extreme Ultraviolet (EUV) lithography systems. In this case, DUV is a more mature technology and remains widely used across both advanced and older semiconductor manufacturing processes, while EUV is required for many of the most demanding layers in leading-edge chips.
Recently, ASML also started introducing High Numerical Aperture Extreme Ultraviolet (High-NA EUV), its next-generation technology designed to enable even smaller features and future semiconductor nodes. Lastly, besides lithography, ASML also sells metrology and inspection equipment used to measure and control the manufacturing process. As a point of comparison, in 2025, the Company sold 48 EUV, 279 DUV, and 208 metrology and inspection systems.
How a chip is made
Companies such as NVIDIA, AMD, Apple and Qualcomm design the architecture and functionality of the chip. They determine what the semiconductor should do before the physical manufacturing process begins.
Electronic Design Automation software from companies such as Synopsys and Cadence converts the chip design into an extremely detailed physical layout that can ultimately be manufactured on silicon.
Shin-Etsu, SUMCO and GlobalWafers manufacture ultra-pure and highly polished silicon wafers. These circular wafers provide the physical base on which the semiconductor structures are built.
Equipment from Applied Materials, ASM International and Tokyo Electron deposits extremely thin layers of material onto the wafer. These layers will eventually form parts of the transistor and its electrical connections.
This is where ASML enters the process. Its Deep Ultraviolet (DUV), Extreme Ultraviolet (EUV) and increasingly High Numerical Aperture EUV systems project extraordinarily small circuit patterns onto the wafer. For leading-edge semiconductor manufacturing, EUV lithography has become one of the most technologically critical parts of the entire production chain.
After lithography determines where microscopic structures should be created, etching equipment selectively removes material from the wafer. Lam Research, Applied Materials and Tokyo Electron are among the largest suppliers in this part of the process.
KLA and other process-control suppliers inspect the wafer for microscopic defects and measure whether each newly created layer is positioned correctly. Even extremely small errors can materially reduce production yields.
TSMC, Samsung and Intel operate semiconductor fabs containing equipment from ASML and many other suppliers. They combine lithography, deposition, etching, cleaning, implantation and inspection into hundreds or thousands of manufacturing steps.
Once fabrication is complete, a single wafer contains many copies of the semiconductor design. The wafer is cut into individual dies, each of which can later become a CPU, GPU, memory chip or another type of semiconductor.
Individual dies are packaged, connected and tested. TSMC, ASE, Amkor and equipment suppliers such as BESI participate in this stage. Advanced AI systems increasingly combine multiple chips and High Bandwidth Memory within a single sophisticated package.
The finished product can be a CPU, GPU, AI accelerator, High Bandwidth Memory chip or smartphone system-on-chip. These semiconductors ultimately power data centres, PCs, smartphones, vehicles and other electronic devices.
Source: ASML, TSMC, Nvidia, Applied Materials, LAM Research, KLA, Synopsys, InterCapital Research
By segment, the Company reports only one operating segment, as the Company’s Management views the Company as a single provider of holistic lithography solutions. However, looking at it more closely, we can distinguish two main revenue streams: System Sales and Installed Base Management (IBM), also called net service and field option sales. System sales include new and used lithography, metrology and inspection equipment, while Installed Base Management consists of services, spare parts, software, productivity upgrades and other improvements made to machines already operating at customer fabrication plants (fabs).
This 2nd part of the business is becoming more and more important. During 2025, ASML generated EUR 24.5bn from system sales, an increase of 12% YoY, and another EUR 8.2bn from IBM revenues, an increase of 26% YoY, driven by a larger installed base, higher equipment utilization and upgrades to existing EUV systems.
ASML revenue breakdown by category (EUR bn), total revenue growth YoY (%) (2020 – 9M 2026*, %)
Source: ASML, InterCapital Research
*9M 2026 YoY calculated versus 9M 2025
During 9M 2026, the strong growth continued, with total revenue reaching EUR 29.8bn (+30% YoY), with net system sales reaching EUR 21.2bn, up 25.6% YoY, while IBM sales reached EUR 8.54bn, a 40.9% increase YoY, also exceeding 2025’s revenue in this segment by 4%. If we look at a longer time period, the revenue expansion is even more noticeable. From 2020 up until 2025, revenue grew by 133%, implying a CAGR of 18.5%, with revenue during 9M 2026 more than double the FY level in 2020.
Top line isn’t the entire story, however, as the Company’s EBITDA expanded even more significantly, growing from EUR 4.5bn in 2020 to EUR 12.3bn in 2025, almost 3x during the period, with the 9M 2026 EBITDA exceeding EUR 12.6bn, meaning that just during those 9 months, almost three times the EBITDA was made compared to the entire year 2020. This would also imply an EBITDA CAGR of 22% per year. This also points towards the significant operating leverage the Company has, with profitability continuing to scale faster than the top line.
ASML EBITDA (EUR bn), EBITDA margin (%) development (2020 – 9M 2026)
Source: ASML, InterCapital Research
However, the increase was far from linear. The strongest growth initially occurred in 2020 and 2021, during semiconductor shortages, growing digital infrastructure investment and strong logic and memory demand. This supported both the top and operating lines. In 2022, revenue growth continued, although the gross margin did decrease somewhat, weighed down by costs related to increasing production capacity, inflationary pressures and shipment/revenue-recognition dynamics.
2023 marked another strong step forward, followed by a transition year in 2024 and renewed acceleration in 2025. During these years, EUV adoption by cutting-edge logic and memory manufacturers was becoming an increasingly important structural driver. 2025 added an additional boost as leading-edge foundry investment related to AI demand accelerated. With the strong demand from AI, many components of a modern PC started to record strong price increases, something that was most documented in DRAM, which recorded triple-digit price increases in certain categories during the last 18 months alone. This was also supported by memory producers reallocating capacity towards HBM and advanced server memory, tightening the supply of conventional DRAM.
ASML net income (EUR bn), net income margin (%) development (2020 – 9M 2026)
Source: ASML, InterCapital Research
The trend continued in 2026, with all three main financial lines growing at double-digit levels at ASML (revenue +30%, EBITDA +45%, net income +57%). The net income growth was also partly supported by an EUR 510m gain on equity investments during Q3 2026. For the entire year, the Company expects revenue of EUR 44-45bn, which would imply an increase of 35-38% YoY, together with a gross margin of approx. 56%. The Company’s Management also recently stated that customers continue to raise their short- and medium-term equipment forecasts, primarily due to expectations surrounding the size and duration of the AI investment. They also noted that some customers are already discussing orders for 2029 and 2030, while ASML also believes that its planned production capacity for both 2027 and 2028 may be insufficient to meet demand. Because of this, the Company is examining further capacity additions for 2028 beyond the previously communicated 30% increase.
One other point worth noting is how fast this growth has occurred, especially compared to the Company’s own expectations. During its 2024 Investor Day, they outlined a 2030 revenue opportunity of EUR 44-60bn, with a gross margin of 56% to 60%. With the lower end of this 2030 range within reach in 2026 already, it would mean that the Company could effectively reach the bottom of its previously outlined 2030 range 4 years earlier.
In general, the underlying growth story is built around several mutually supporting drivers. AI requires increasing quantities of leading-edge Logic chips and HBM (High Bandwidth Memory), which in turn encourages TSMC, Samsung, Intel, SK hynix, Micron, and others to expand advanced semiconductor capacity. At the same time, new manufacturing nodes require greater lithography intensity, supporting additional EUV demand. High-NA EUV also provides ASML with another technology upgrade cycle, while every additional system sold expands the installed base from which the Company can generate recurring service and upgrade revenues.
Compared to its peers, ASML sits within the broader semiconductor equipment industry alongside companies such as Applied Materials, Lam Research, KLA, Tokyo Electron and ASM International, although due to the difference in the businesses’ structure, they should not all be considered direct competitors. Applied Materials, Lam and Tokyo Electron are strong in deposition and etching; KLA focuses primarily on process control and inspection, while ASM International has a strong position in atomic layer deposition. ASML, meanwhile, is strong in lithography, and most importantly, it has a unique position in EUV.
Profitability comparison between ASML & peers (Latest data*, %)
Source: Companies’ data, InterCapital Research
*ASML 9M 2026, KLA and Lam FY 2026, Applied Materials Q3 FY 2026; the companies have different reporting periods, and as such the numbers should be treated as indicative of profitability between these companies.
Within its peer group, ASML is not the only one with good profitability. KLA, for example, has slightly higher gross and operating margins. What differentiates ASML is how that profitability is earned. In most semiconductor equipment categories, several suppliers compete for customer spending. In leading-edge EUV lithography, ASML occupies an effectively unique position. This makes its products extremely hard to substitute and gives the Company exposure not simply to growth in semiconductor CAPEX, but also to the increasing technological complexity of each new generation of chips.
ASML, AEX index price performance (2020 – 2026 YTD, 2020=100)
Source: Bloomberg, InterCapital Research
Nobody can say this is an unknown stock, however. The exposure the Company has been getting has been reflected strongly in its share price, with the price standing at around EUR 400/share at the end of 2020, and it grew all the way to EUR 1,477 per share as of 16 October 2026, an increase of more than 270% during that period. As a point of comparison, the AEX index grew by only 83% during that same time frame.
Overall, ASML presents a compelling case of a European company that has been integrated into some of the most important supply chains in the world. We often hear about Nvidia or AMD and their chips, particularly CPUs or GPUs, or about Apple or Samsung and their phones. We also hear about TSMC and how, without its semiconductor manufacturing capabilities, the entire technological advancement couldn’t occur.
What we often don’t hear about is the silent engine at the heart of this chain. Without the advanced lithography machines, none of these advancements could be possible. With the strong AI demand and billions, if not trillions, that are to be spent on it in the next couple of years, the demand is astounding. ASML continues to invest and grow. Unlike many companies which got replaced by AI in the last couple of years, ASML’s MOAT is huge and unlikely to be broken, similar to the dams that surround and secure the country of its origin.