The most important tech company you've never heard of

It is Europe’s most valuable tech company. Its market cap has gone from $25 billion to $225 billion in a decade. And eight months ago, it hit a lifetime high of over $350 billion. This Dutch company made almost $20 billion in net sales and over $6 billion in profits last year.

 Yet, the chances are you may not have heard about it.

The company, ASML Holdings, describes itself as the “most important tech company you’ve never heard of” and rightly so. 

ASML is one of the world’s leading manufacturers of chip-making equipment. It designs and manufactures lithography machines-- an essential component in manufacturing microchips which go into smartphones, data centres, personal computers, laptops, cars and much more. 

ASML makes lithography systems, used to create the circuitry of computer chips. Its lithography systems can be found in the factories of every major chipmaker in the world. ASML’s most advanced machines use a wavelength of light called EUV, which stands for extreme ultraviolet.

The machine uses EUV light beams, generated by lasers and focused by giant mirrors, to lay out extraordinarily narrow circuits on slabs of silicon known as wafers.

That in turn makes it possible to create faster and more powerful microprocessors, memory chips and other advanced components, which are critical for consumer electronics and military applications alike.

A lithography system projects light through a blueprint of the pattern onto a photosensitive silicon wafer. After the pattern is printed, the system moves the wafer slightly and makes another copy on the wafer.

This process is repeated until the wafer is covered in patterns, completing one layer of the wafer’s chips. To make an entire microchip, this process is repeated layer after layer, stacking the patterns to create an integrated circuit (IC). The simplest chips have around 40 layers, while the most complex can have over 150 layers. 

Only a few companies, including America’s Intel, South Korea’s Samsung Electronics and Taiwan’s TSMC, are currently capable of manufacturing the most sophisticated chips. And they’ve come to depend on ASML to make them.

11,000 of its 32,000-strong workforce is engaged in Research and Development (R&D).  Since 2000, ASML has rapidly taken market share from Japanese competitors Nikon and Canon, which now mainly focus on older technology. ASML controls more than 90% of the lithography market and no competitor is attempting to build an EUV system, citing high development costs.

Amid a global chip shortage, the demand for ASML’s systems is higher than its current production capacity.

Last year, it sold 42 extreme ultraviolet or EUV systems and this year it expects to ship 55 units. It is the only manufacturer of EUV systems that are used in making the world’s fastest microprocessors.

ASML says its job is to help the industry continue Moore’s Law. In 1965, Gordon Moore, one of Intel’s co-founders, observed that the number of transistors on a microchip was increasing rapidly, exponentially increasing the computing power while decreasing the cost of the chip.

Moore predicted that the number of transistors would double every year for the next decade. In 1975, he revised the prediction to every two years. His prediction has proved to be true and today’s microchips contain tens of billions of transistors.

ASML’s EUV machine pushes Moore’s Law forward and chip makers cannot produce leading-edge chips without it.  

Delivering just one of these takes three Boeing 747 cargo planes, 40 freight containers and 20 trucks. The bus-sized machine comprises 100,000 parts, weighs nearly 200 tonnes and costs around $150 million. A cutting-edge chip plant needs 9-18 of these machines, which are one of the biggest capital costs for chipmakers.

 ASML’s next iteration of the system, known as "High NA" EUV machines, will be even larger, and cost around $300 million each.