ASML — Europe's (Last) Trump Card

I. The Monopoly

In Veldhoven, an unremarkable town near Eindhoven, stands a company that holds the entire digital world in its hands. Not figuratively. Literally.

ASML is the only manufacturer of EUV lithography machines on the planet. Without these machines, no chips below 7 nanometers. Without chips below 7 nanometers, no modern smartphones, no AI accelerators, no high-performance computers. The entire technological future — from autonomous driving to medical imaging — flows through this single bottleneck in the Netherlands.

The figures for the first quarter of 2026, presented on 15 April 2026: €7.7 billion in revenue. €2.4 billion net income. Gross margin 53 percent. Full-year 2026 guidance raised to €36-40 billion. Year-end 2025 order backlog: €38.8 billion, of which €7.4 billion in EUV bookings. Outlook to 2030: €44-60 billion in annual revenue. Market share in EUV lithography: 100 percent. Nikon and Canon publicly walked away from EUV development years ago.

OPEC controls 40 percent of global oil production and is considered a powerful cartel. ASML controls 100 percent of EUV production. There is no cartel — there is only ASML. And ASML is European.

This is no exaggeration. TSMC in Taiwan, the world's largest contract manufacturer, is completely dependent on ASML. Samsung in Korea, Intel in the USA — they all stand in line for machines from Veldhoven. Apple, Nvidia, AMD — their products exist only because ASML delivers. A Low-NA EUV system sells for roughly €180 million, the new High-NA generation for €380 million each. Customers pay because there is no substitute below the 7nm node.

Europe has lost almost everything in the digital world — the platforms, the data, the cloud, the social networks. But at the root of the entire hardware supply chain sits a Dutch company without which nothing works.

II. The 30-Year Bet

How could a European company reach this position — in an industry dominated by American and Asian giants?

The answer is: through a bet that no one else was willing to make. ASML began developing EUV technology in the 1990s, when most experts considered it impossible. Over nine billion dollars flowed into research and development. Decade after decade, with no guarantee of success.

The technical hurdles were absurd. EUV light has a wavelength of 13.5 nanometers — so short that it is absorbed by everything, including air. The entire process must take place in a vacuum. The light source is created by a high-powered laser firing 50,000 times per second at tiny tin droplets, creating a plasma forty times hotter than the surface of the sun. The mirrors that direct this light onto the wafer must be perfect at the atomic level — a molecular deviation would be fatal.

The European ecosystem is the condition of possibility. Carl Zeiss SMT in Oberkochen is the sole supplier of high-precision EUV optics and mirrors — without Zeiss, no ASML. TRUMPF in Ditzingen supplies the world's most powerful pulsed industrial lasers for the EUV light source. imec in Leuven is the leading semiconductor research center and operates the High-NA EUV Lab with ASML. Fraunhofer IOF in Jena developed the reflective coating for the EUV mirrors. In 2020 the research team of ZEISS, TRUMPF and Fraunhofer received the German Future Prize for the development of EUV lithography. It was recognition of what they had achieved: a European success story, born of collaboration, precision and perseverance.

The crucial point: this technology cannot simply be copied. ASML machines consist of over 50,000 components from more than 800 suppliers. Thirty years of iterative improvements, discovered dead ends, built supplier relationships, optimized manufacturing processes — that cannot be compressed. Even with unlimited budget and access to all the engineers, a competitor would need decades. That it could happen at all is the positive mirror of what our other texts diagnose: a counter-example to the sheltered workshop. Here nothing was tinkered with. Here something was finished.

III. America's Grip

Washington recognized early what ASML means. And Washington acted — not to strengthen Europe, but to use ASML as a weapon against China.

The chronicle of pressure is a chronicle of European acquiescence. In 2018, the Dutch government approved EUV export licenses for China. In 2019, the Trump administration pressured the Netherlands; the licenses were not renewed before a single EUV machine had been delivered to China. In 2023 the Netherlands banned the export of advanced DUV machines (ArF Immersion) to China as well. In 2024 the US overrode the Dutch decision and unilaterally banned the export of even older DUV machines — ASML's cash cows. In 2025, export controls were further tightened.

The pattern is clear: the US uses its leverage — American components in ASML machines, the de minimis rule of US trade law — to instrumentalize a European company for American geopolitics. The Netherlands was pressured, and when that was not enough, it was overruled.

The process has caused unease in Europe. Dutch government officials publicly expressed concerns about sovereignty. There were moves to apply the EU's Anti-Coercion Instrument — a tool created to counter economic pressure from third countries. But the large EU member states — Germany, France — were more concerned with the effects of the American Inflation Reduction Act on their automotive industries. ASML was not defended as a European asset, but treated as a bargaining chip. The US even used its Ukraine support as leverage to push the Netherlands into export restrictions. Europe's most important technology company became a pawn of American interests — with European acquiescence.

Yet ASML holds enormous potential. If the machines needed to produce chips are controlled by a European company — why doesn't Europe use this leverage itself? Why leave the lead to Washington? The answer to this question is not to be found in Veldhoven, but in Berlin, Paris and Brussels — and it has a name: with this personnel — no chance.

IV. The MATCH Act — the next stage

In April 2026 the situation sharpened again. American lawmakers introduced the Multilateral Alignment of Technology Controls on Hardware Act, MATCH Act for short. The draft legislation would ban the export of DUV immersion lithography systems and — crucially — the servicing of existing equipment in China. Chinese chipmakers Semiconductor Manufacturing International, ChangXin Memory Technologies, Yangtze Memory Technologies, Hua Hong and Huawei are named specifically.

The servicing ban is the actual point. A lithography machine is a $200 million tool that becomes unusable within months without continuous servicing by the manufacturer. Whoever controls the servicing controls the machine, even after it has been delivered. The MATCH Act would not merely restrict future sales but erode the installed base.

The clause that should make every European observer sit up is in the section on allies: the Netherlands and Japan would have 150 days to adopt the American restrictions — or lose access to American technology in their own supply chains. That is not negotiation. That is an ultimatum.

The consequences are already visible in the ASML quarterly report. In the first quarter of 2026, the China share of system revenue fell to 19 percent — down from 36 percent in Q4 2025 and 33 percent for full-year 2025. ASML expects roughly 20 percent China share for 2026 even without the MATCH Act. With the MATCH Act, the decline would be far steeper. Applied Materials projects $600 million to $710 million in lost China revenue for fiscal 2026. Lam Research expects its China share to fall from 43 percent in Q1 to below 30 percent by year-end.

ASML made a remarkable decision in the same quarter: the publication of quarterly bookings is being discontinued. For years this was the key metric by which analysts read demand. ASML is switching off the light at the very moment when it would be interesting to look inside. A simultaneous €1 billion share buyback may calm the shareholders; it does not calm the strategic situation.

V. The Chinese Shadow

Beijing has understood what is at stake. The inability to procure EUV machines is the biggest bottleneck for China's technological ambitions. So China has launched a Manhattan Project for chips — coordinated by Huawei, funded by the state, executed by thousands of engineers.

In December 2025, Reuters reported that a prototype EUV machine had been completed in a high-security laboratory in Shenzhen. Former ASML engineers were reportedly involved. The machine uses a different technology than ASML — Laser-Induced Discharge Plasma (LDP) instead of Laser-Produced Plasma (LPP) — but it can generate EUV light.

The sober answer to what this means: not much yet. The Chinese prototypes achieve power levels of 100 to 150 watts. Mass production requires at least 250 watts. The optics, masks, photoresists — there are bottlenecks everywhere. ASML CEO Christophe Fouquet estimates China's lag at ten to fifteen years, possibly more.

But history counsels caution. In 2023, Huawei surprised the world with the Mate 60 Pro — a smartphone with a 7-nanometer chip, manufactured despite all sanctions. China had stockpiled DUV machines and pushed them to the maximum with multi-patterning techniques. The yield was poor (estimated 30 to 35 percent), the costs enormous — but it worked.

If China is willing to sacrifice economic efficiency for strategic autonomy — and all indications point that way — then ASML's lead is finite. The question is not whether, but when China can produce functional EUV machines. 2028? 2030? Later? Eventually it will happen.

VI. The American Alternative

While China pushes from below, another pressure emerges — from an unexpected direction.

Pat Gelsinger, the failed CEO of Intel, has not given up. As Executive Chairman of xLight, a startup founded in 2024, he is working on an alternative to the EUV light source. xLight is developing free-electron lasers based on compact particle accelerators — a radically different technology than ASML's laser-produced plasma method. The Trump administration has provided xLight with up to $150 million in government funding. The promise: 30 to 40 percent lower wafer processing costs and reduced energy consumption. The goal: first silicon tests by 2028.

The immediate threat to ASML is low. xLight is not building complete lithography machines — only better light sources. And bringing particle accelerators from labs like CERN into factory floors is a massive challenge. But the signals are clear: the US does not want to remain permanently dependent on a European company.

The CHIPS Act has allocated $52 billion for domestic semiconductor production, including $825 million for an EUV Accelerator program. The strategic logic is clear: ASML's monopoly is a vulnerability for American technological leadership — a vulnerability that Washington wants to eliminate long-term. What Washington uses against China today, it does not want used against itself tomorrow.

VII. The European Question

Europe possesses with ASML a lever it barely uses. A Dutch think tank (DenkWerk) recently put it bluntly: If you want to act geopolitically, you also have to do geopolitical things.

The idea is simple: ASML could be an instrument of European policy — not just American. The EU could tie export licenses to conditions. It could require that chips manufactured with ASML technology meet certain standards — for example in AI safety. It could use service and maintenance — 20 percent of ASML's revenue — as leverage. ASML reportedly even has a kill switch in its machines, originally developed for the scenario of a Taiwan invasion.

But that would require Europe to understand ASML as a strategic asset — not as a Dutch company that happens to be successful. It would require the EU to develop a coherent technology policy instead of leaving the field to member states. It would require Europe to be willing to risk conflicts with Washington. It would require the anachronistic structures in which European parliamentary and Commission personnel operate to be overcome.

None of this is in sight. The European Chips Act mobilizes €43 billion — considerable, but a fraction of what the US and China are investing. The EU plans to double its global market share in chip production from 10 to 20 percent — a goal that even optimists consider unrealistic. There is, at least, this: the EU is investing €700 million in a NanoIC pilot line at imec in Leuven, backed by ASML and national governments. It is a beginning. It is no more than that.

Europe possesses the decisive technology for the digital future — and treats it like an export commodity rather than a strategic weapon. The US has understood this. China has understood this. Only Europe seems not to understand it.

VIII. For how long?

The question is not whether ASML's monopoly will last forever. No technological monopoly lasts forever. The question is how Europe uses the remaining time.

Short-term, until 2028, ASML's position is unassailable. The order books are full. The next generation — High-NA EUV with 0.55 numerical aperture instead of 0.33 — is being shipped. Intel, TSMC, Samsung are lining up. The AI boom drives demand. China can at best experiment. Even the MATCH Act, if passed, would hurt the business but not break it.

Medium-term, between 2028 and 2035, it gets more complicated. China could develop functional EUV machines — not as good as ASML, but sufficient for the domestic market. xLight or similar projects could challenge ASML's light source technology. Alternative approaches like nanoimprint lithography could become competitive for certain applications.

Long-term, after 2035, everything is open. Moore's Law is approaching physical limits. New paradigms — quantum computing, neuromorphic chips, optical computers — could change the rules. ASML is already investing in adjacent areas, but no one knows which technology will dominate the next era.

The trump card is still in play. But trump cards only help if you play them. Europe holds it in hand and watches others shuffle the deck.

IX. The Structural Answer

The February version of this essay ended with the question What does Europe make of the time it has left? and the answer too little. Three months later, in May 2026, we have to sharpen the answer.

Europe does too little not by accident. Europe does too little because the political personnel that today carries Europe was not chosen for the tasks that need solving. It is a personnel that thinks in the categories of the electoral term, not in those of the thirty-year bet that made ASML what it is. It is a personnel that operates in the realm of speech, not in the realm of facts. It is a personnel whose career trajectories presuppose the opposite of what happened at Zeiss, TRUMPF, imec and ASML: a long, shared, fact-oriented work on a task whose outcome was not foreseeable at the beginning.

What happened at ASML is the positive mirror of what we have described in our other essays as negative diagnosis. Whoever seeks proof that European cooperation can produce world-class results finds it in Veldhoven, Oberkochen, Ditzingen, Leuven and Jena. Whoever seeks proof of why these results are not being translated into geopolitical bargaining power finds it in Berlin, Paris and Brussels — with a personnel that does not understand what it holds in its hands.

ASML is not an anomaly. It is the proof that Europe can. That Europe does not do what it could is not a question of means. It is a question of the selection of those who have the means at their disposal.

Trump cards only help if you play them. Whoever does not play the card does not have it. What Europe holds today is not a card. It is the memory of once having had one.