Source: CNBC columnist Katie Tarasov
Behind the tightly secured doors of a large laboratory in the Netherlands, a machine is revolutionizing the way microchips are manufactured—ASML’s High Numerical Aperture (High NA) lithography machine, which has been under development for nearly a decade. Costing over $400 million, it is the most advanced and expensive chip-making equipment in the world.
In April, CNBC visited the laboratory in the Netherlands. Prior to this, the High NA device had never been publicly filmed, and even ASML’s internal teams rarely had a chance to see it in full. In the lab, Assia Haddou, head of the High NA certification team, presented the machine—”larger than a double-decker bus”—up close.
The machine consists of four modules manufactured in Connecticut, California, Germany, and the Netherlands, respectively. These are then assembled, tested, and certified at a laboratory in Veldhoven, the Netherlands, before being disassembled for transport. Haddou mentioned that transporting a single system requires seven partially loaded Boeing 747 aircraft or at least 25 trucks.
In 2024, the world’s first High NA system was commercially deployed at Intel’s chip factory in Oregon. So far, only five of these giant systems have been delivered. Only a few companies can afford them, including TSMC, Samsung, and Intel, which are ramping up production to manufacture millions of chips.
The High NA system is the latest generation of ASML’s Extreme Ultraviolet (EUV) lithography machines. As the sole producer of EUV systems, ASML’s equipment is the only lithography technology in the world capable of projecting the smallest circuit blueprints for cutting-edge microchips. Tech giants like Nvidia, Apple, and AMD all rely on EUV technology. ASML has stated that all EUV customers will eventually adopt High NA technology, including other advanced chipmakers such as Micron, SK Hynix, and Rapidus.
Daniel Newman, CEO of global technology research and consulting firm Futurum Group, remarked: “ASML has completely monopolized this market.” When CNBC asked ASML President and CEO Christophe Fouquet what stops ASML from further increasing equipment prices, he explained that as the machines advance, the cost of chip production actually decreases. Fouquet said, “Moore’s Law tells us we must continuously lower the cost of ownership. It’s widely believed that lowering costs creates more opportunities, so we must join the race.”
ASML’s two largest customers have confirmed that High NA offers significant performance improvements over previous EUV models. At a conference in February, Intel revealed it had produced about 30,000 wafers using High NA, with reliability roughly double that of the previous generation; Samsung stated that High NA can reduce production cycles by 60%, meaning more computations per second per chip.
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“A high-risk investment”
High NA increases speed and performance, reducing chip prices while improving yield—meaning more usable chips per wafer. This is due to its higher resolution, enabling precise projection of chip designs. High NA continues EUV’s process but with a higher numerical aperture optical system, which allows for smaller chip features in fewer steps.
Jos Benschop, ASML’s Executive VP of Technology, stated: “High NA has two core advantages: first, improved pattern miniaturization, which allows more chip units per wafer; second, reduced multiple exposures, which speeds up production and improves yield.” Benschop, who joined ASML in 1997 when it had been public only two years, helped push the company’s full investment in EUV—a technology that took over 20 years to develop. “What people often forget,” he said, “is that we nearly failed to bring this technology to fruition. It was a high-risk, forward-looking investment because, at the start, we had no idea if the technology would work.”
By 2018, ASML had proven EUV’s feasibility, prompting mass orders from chipmakers. Twenty years ago, generating large amounts of EUV light, passing it through ever-shrinking masks, and projecting it onto photoresist-coated silicon wafers seemed like science fiction.
To generate EUV light, ASML fires molten tin droplets at 50,000 drops per second from a nozzle, blasting each with high-powered lasers to create plasma hotter than the sun. These tiny explosions are the source of EUV photons with a wavelength of just 13.5 nanometers. EUV light is about five DNA strands wide and easily absorbed by all known materials, so the entire process must occur in a vacuum. The EUV light is reflected by mirrors and directed at targets using a lens, similar to a camera. To solve the issue of light absorption by mirrors, Zeiss of Germany custom-made the flattest mirrors in the world for ASML.
Earlier-generation DUV lithography machines used 193-nanometer deep ultraviolet light and had lower precision. ASML still manufactures these systems and competes with Nikon and Canon in the DUV market, but it is the only company globally to succeed in EUV.
Around 2016, ASML began development of the $400 million High NA system. Its working principle is similar to DUV, using the same EUV light source, but with one key difference: High NA uses larger lens openings to capture more light at steeper angles, enabling more precise image transfer. This allows the system to expose ultra-fine chip patterns in a single shot, whereas traditional low-NA systems require multiple exposures and masks. “The more exposures, the more complex the process and the lower the yield,” said Fouquet.
Resolution improves with higher numerical aperture (NA), reducing the need for multiple masks and exposures, thus saving time and cost. However, the cost of High NA equipment rises accordingly. “The bigger the mirror, the larger the system,” said Fouquet. These machines also consume enormous amounts of power. “If we don’t gradually improve the efficiency of AI chips, by around 2035, model training may consume global energy resources.” He noted that since 2018, ASML has reduced energy consumption per wafer exposure by over 60%.
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China Market and U.S. Tariffs: Uncertain Factors to ASML
ASML is renowned for its breakthrough EUV lithography machines, but in 2024, its earlier DUV machines still accounted for 60% of its business. Last year, ASML sold 44 EUV machines, each starting at $220 million; DUV machines are much cheaper (between $5 million and $90 million), but 374 were sold in 2024. China is the main buyer of DUV machines, making up 49% of ASML’s Q2 2024 business.
Fouquet stated, “Sales in China peaked because ASML was fulfilling a backlog of orders that had built up until last year. By 2025, China’s share should return to its historical norm of 20%–25%.” U.S. export controls prohibit ASML from selling EUV machines to China, a ban initiated under the Trump administration. According to Newman of Futurum Group, China has a very low chance of independently developing EUV and may instead use DUV machines to manufacture smartphones and other devices.
Amid the AI race, U.S. concerns about advanced tech flowing into China are increasing, which has also pushed up chip stocks—ASML shares hit an all-time high in July. Benschop said, “ASML still can’t clearly determine the impact of tariffs. The company has about 800 suppliers worldwide, and tariff effects are very complex.”
Manufacturing a High NA machine involves multiple cross-border stages: four modules built in the U.S., Germany, and the Netherlands are shipped to the Netherlands for assembly and testing, then disassembled and shipped to chip fabs in the U.S. or Asia. For years, over 80% of ASML’s business has been in Asia. In 2024, the U.S. market share was about 17% and growing fast. ASML has 44,000 global employees, with 8,500 in 18 U.S. offices.
In 2024, ASML’s North American shipments mainly went to Intel, which is building new fabs in Ohio and Arizona. Despite Intel’s recent struggles, Fouquet still calls it a key partner vital to America’s semiconductor independence.
TSMC leads Intel in chip process technology. Its new fab north of Phoenix is already mass-producing chips. As the most advanced U.S. chip plant, its demand for High NA systems is likely to rise soon. Meanwhile, ASML is building its first training center in Arizona. Fouquet revealed that it will open in the coming months and aims to train 1,200 EUV and DUV technicians annually to meet U.S. and global talent demands.
ASML also plans to further enhance the next generation of equipment—Hyper NA—by increasing its numerical aperture. Fouquet said the company has completed partial optical design sketches for the next-gen system and that it may not be especially difficult to manufacture. He anticipates demand for Hyper NA will emerge between 2032 and 2035, but offered no pricing estimates. For now, ASML is focused on meeting High NA demand, aiming to deliver at least five more systems this year and increase production capacity to 20 units in the coming years.
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