ASML’s Core Technology and the Companies Developing Alternatives

ASML, based in Veldhoven in the Netherlands, makes lithography machines for chip manufacturing. According to The Next Web, it is currently the only maker of EUV lithography machines. This reference describes ASML’s financial position and core technologies, and the US, Chinese and Japanese companies and laboratories reported to be developing alternative light sources, exposure methods and tools. Statements are attributed to the companies and publications that made them.

ASML’s financial position and capacity

ASML reported record net sales of €11.7 billion for the third quarter of 2026, up from €9.3 billion in the second, with a 57.5% gross margin and net income of about €5.0 billion, according to its October 14 results. It sold 113 new lithography systems in the quarter, against 86 in the second. It expects full-year 2026 net sales of €44 billion to €45 billion and guided to €14.2 billion to €15.2 billion for the fourth quarter.

ASML CEO Christophe Fouquet said ASML now expects that its supply “as currently planned for both 2027 and 2028 will not fully meet the demand of our customers,” and that “some customers are expressing an interest in placing orders with us for 2029 and even 2030.” He attributed rising customer forecasts primarily to their views on “the size and duration of AI-related investments.” In July, ASML said it planned to add 30% in 2027 to its 2026 low-NA EUV capacity of around 65 and to its DUV immersion capacity of around 130. In October it said it is investigating ways to increase capacity for 2028 beyond that 30%. IPS News reported in June that ASML has commanded over 80 percent of the lithography equipment market, and CNBC reported that China accounted for 14% of ASML’s net system sales in the second quarter.

ASML’s core technologies

ASML’s machines move light from a source through a mask and optics onto a wafer, with measurement and software around that path. Lens’s earlier article, ASML’s China Dip, Five Levels Down, covers the optics equation, multipatterning, photon counting and mirror wear. This section follows the light from source to wafer and then the control loop, using ASML’s own pages unless another source is named.

ASML sells three families of tool. Its dual-stage TWINSCAN NXE:3800E supports high-volume manufacturing of 2 nm logic and leading-edge DRAM. The EXE:5200B is its second 0.55 NA, or High-NA, EUV system, after the EXE:5000, and ASML lists 8 nm resolution, 40% more imaging contrast than its NXE systems, single-exposure features 1.7 times smaller and transistor densities 2.9 times higher. The third family is DUV immersion: the NXT:2100i uses argon-fluoride excimer lasers that produce 193 nm light and, ASML says, improves single-machine overlay by up to 10% (0.9 nm) and matched-machine overlay by 13% (1.3 nm) over its predecessor, the NXT:2050i.

1. The source. ASML says EUV uses 13.5 nm light, more than 14 times shorter than DUV. Molten tin droplets about 25 microns across are ejected at 70 meters per second; a low-intensity laser pulse flattens each droplet and a stronger pulse vaporizes it into a plasma that emits EUV light, repeated 50,000 times every second. Reuters reported in February, as summarized by TrendForce, that current sources deliver 600 W and that ASML aims for 1,000 W by roughly doubling the droplet rate to about 100,000 a second and using two smaller laser bursts. ASML’s Teun van Gogh said customers should reach around 330 wafers an hour per machine by the end of the decade, up from roughly 220 today. Reuters reported that this could allow up to 50% more chip production by the end of the decade.
2. The illuminator and mask. The light is shaped before it reaches the pattern. ASML’s DUV FlexRay illuminator uses an array of 4,000 individually controllable mirrors, and its EUV FlexPupil fills a similar role, angling light onto the reticle and adjusting how it moves through the system to improve contrast. The pattern on the reticle is itself computed: ASML says computational lithography simulates the manufacturing process with algorithms to design the reticle, deliberately deforming the pattern in a step called optical proximity correction.
3. The optics. EUV light is absorbed by most materials, so ASML’s systems use ultra-smooth multilayer mirrors in a vacuum instead of lenses. Each mirror has over 100 layers, the largest are about 1 meter across and smooth down to tens of picometers, and ASML says all its lithography systems since the late 1980s have featured optics from its “strategic partner ZEISS.” Synopsys’s Zachary Levinson says High-NA systems use anamorphic lenses, with 4X demagnification in one direction and 8X in the other, which address interference between incident and reflected light. According to Semiconductor Engineering, the field shrinks to half the standard size, so patterns on larger chips must be stitched together from two exposures.
4. The stages. The reticle passes a narrow slit of light while the wafer moves the opposite way, and the two stay in sync “to the nanometer and nanosecond” while accelerating at 5 g and 15 g in opposite directions, ASML says. Its wafer tables are magnetically levitated, and sensors measure wafer position some 20,000 times a second with accuracy around 60 picometers. The dual-stage TWINSCAN design, first marketed in 2000, measures one wafer while the other is exposed.
5. The control loop. ASML describes measurement as a closed loop. YieldStar optical metrology tracks overlay, “the accuracy with which two layers of a chip are aligned,” and focus. Its HMI e-beam tools offer 1 nm resolution and can spot defects a couple of nanometers across, but they are slower and typically used after etching; a 3x3 multibeam system can raise throughput by around a factor of nine. Hundreds of sensors and software coordinating thousands of actuators compensate for sub-nanometer errors, a single system can generate up to 31 terabytes of sensor data a week, and metrology data is fed back to the lithography system in real time.

ASML reports servicing of machines already sold as Installed Base Management, which brought in €3.3 billion of third-quarter sales, according to its results presentation.

China: a state-led EUV prototype, light sources and DUV tools

Reuters reported in December 2025, citing unnamed sources and as summarized by TrendForce, that China has built a prototype EUV machine. The government leads the project, and Huawei reportedly coordinates a nationwide network of companies and institutes. According to the report, former ASML engineers reverse-engineered EUV machines while working under aliases, and the prototype uses parts from older ASML systems plus export-restricted components from Nikon and Canon. It reportedly lacks the ultra-precision optics made by Germany’s Carl Zeiss. The machine, reportedly completed in early 2025 and still being tested, can generate EUV light but “has not yet produced working chips.” Beijing reportedly aims to produce functional chips with it by 2028.

At the 26th China International Industry Fair in Shanghai, Langdao Silex showed a prototype laser-produced-plasma EUV light source, XenoSpectrum reports from a Jiefang Daily article of October 14. A low-power model lists a 1,000 W drive laser, over 15 W of EUV output, over 2% conversion efficiency and over 100 hours of continuous operation; a high-power model has completed only proof of principle. Staff said the domestic content is 90%; the basis for the figure was not stated. Mass production of the source is expected in three to five years. The figures are published by the company.

On DUV, the Financial Times reported in September 2025, as summarized by TrendForce, that SMIC was testing an immersion DUV tool from Yuliangsheng, a local start-up whose shareholders reportedly include SiCarrier, a Shenzhen company reportedly linked to Huawei. The tool targets 28 nm chips, with multi-patterning aimed at 7 nm-generation chips. On July 27, 2026, The Information reported that a Chinese company has started making an immersion DUV machine, with deliveries expected this year to chipmakers including SMIC and CXMT, CNBC reported. The developer reportedly aims to produce about five units in 2026 and around 20 in 2027. ASML’s shares fell as much as 8% that Monday, according to CNBC.

Tsinghua University leads a different route: a particle-accelerator light source known as steady-state microbunching, or SSMB. Chinese experts say it could reach 1,000 W of EUV power, and a 2023 IO+ report said the team was in talks with Xiong’an authorities about a site for an accelerator-based facility. A Chinese firm, Prinano, delivered its first self-developed nanoimprint machine in 2025, Techzine reported, claiming lines under 10 nm and targeting memory chips such as NAND. For more on China’s DUV push and the market reaction, see Lens’s earlier article, ASML’s China Dip, Five Levels Down.

New light sources: xLight and Inversion in the US

ASML’s machines make EUV light by firing lasers at tin droplets, according to The Next Web. xLight, a startup chaired by former Intel CEO Pat Gelsinger, is developing a free-electron laser powered by a compact particle accelerator, which the company says can reach wavelengths as low as 2 nm. The US Commerce Department has completed a $150 million CHIPS Act award to fund the prototype. xLight has raised about $200 million in total, and The Information reported that it was in talks to raise another $350 million, with Boardman Bay Capital and Bain Capital reportedly preparing to lead; as of The Next Web’s June 24 report, the round had not been signed. A first working prototype is due in 2028 at the Albany NanoTech complex in New York. The Next Web reports that the system has not been built, that free-electron lasers have not previously run an EUV production line, and that xLight intends to supply its light source to ASML.

A Dealroom note from August says Japan’s KEK is exploring a similar approach and describes free-electron-laser EUV as not yet production-ready. It lists the claimed advantages of free-electron lasers as higher power, no tin debris and a tunable wavelength.

Inversion Semiconductor is a Y Combinator W25 startup working on EUV light sources. Seedtable lists a $500,000 seed round in March 2025. It is reportedly pursuing a laser-driven particle accelerator as the source.

X-ray lithography: Substrate

Substrate, a San Francisco startup, raised $100 million in October 2025 at an implied $1 billion valuation, according to SiliconANGLE. Investors include Founders Fund, General Catalyst, Allen & Co, Long Journey Ventures, Valor Equity Partners and In-Q-Tel. CEO James Proud told the Wall Street Journal that its X-ray tool prints at “similar resolutions to the most advanced machines sold by ASML” and removes the need for multi-patterning. SiliconANGLE says the company has demonstrated the technology at US national laboratories and its own facilities, and that Proud says the company needs three years to produce its first processors.

Japan: Canon’s nanoimprint and Nikon’s DUV tools

Canon’s FPA-1200NZ2C does not project light onto the wafer. Canon says it presses a mask carrying the circuit pattern into the resist “like a stamp,” and that this enables a minimum linewidth of 14 nm, “equivalent to the 5-nm-node.” With mask improvements, Canon expects 10 nm, which it links to the 2 nm node. Canon says the approach can reduce power consumption significantly and “may reduce the cost of ownership,” without giving figures.

Canon’s first official sale of the tool, in 2024, went to the Texas Institute for Electronics for research and prototype production, according to Bits&Chips, which also reports that Canon focuses on i-line and 248 nm tools. A Canon spokesperson told Nikkei the company aims to sell around 10 to 20 units a year within three to five years.

An analysis by Dr. Jose Luis Chavez Calva, published by IPS News on June 10, reports that Nikon plans to offer lower-priced ArF immersion systems and that “several conversations” with US and Asian chipmakers are “approaching formal purchase orders.” No dates or orders were given.

AI companies and lithography

The reporting reviewed links three AI-related companies to lithography.

• Terafab, US. Terafab, a planned 2 nm chip-manufacturing venture in Austin, Texas, was announced in March 2026 as a joint venture of Tesla and SpaceX, according to Bits&Chips, which notes that SpaceX recently took over xAI; Dealroom also links xAI and Intel to the venture. Bits&Chips reports an initial target of 100,000 wafers a month. Dealroom reports that Elon Musk has expressed interest in free-electron-laser lithography. Fouquet confirmed direct talks with Musk in May, and Dealroom reported in August that no equipment order had been made public. On October 19, Bits&Chips headlined that Terafab is “reportedly to receive first ASML EUV scanner in mid-2027”; other reporting attributes the timing to unnamed sources and says early operations would use conventional EUV rather than free-electron lasers.
• Nvidia, US. Nvidia announced cuLitho in March 2023 to run computational lithography on GPUs. According to coverage of the announcement, TSMC and Synopsys integrated it and ASML planned to add GPU support to its own computational lithography software.
• Huawei, China. Reuters reports that Huawei reportedly coordinates China’s EUV network, and the Financial Times reports that SiCarrier, reportedly linked to Huawei, is a Yuliangsheng shareholder. Both reports rely on unnamed sources.

Market position and capacity

• ASML is currently the only maker of EUV lithography machines (The Next Web).
• ASML has commanded over 80 percent of the lithography equipment market (IPS News, June 2026).
• ASML sold 113 new lithography systems in the third quarter of 2026 and 86 in the second (ASML).
• China accounted for 14% of ASML’s net system sales in the second quarter of 2026 (CNBC).
• ASML’s 2026 capacity is around 65 low-NA EUV and around 130 DUV immersion systems, with 30% more planned for 2027 (ASML).
• A Chinese immersion DUV maker reportedly plans about five tools in 2026 and about 20 in 2027 (CNBC, citing The Information).

Reported timelines and scheduled dates

• End of 2026: ASML guides to €14.2 billion to €15.2 billion of fourth-quarter net sales and €44 billion to €45 billion for the full year.
• 2027: ASML plans to add 30% to its 2026 low-NA EUV and DUV immersion capacity. A Chinese immersion DUV maker reportedly plans about 20 tools. Terafab is reportedly to receive its first ASML EUV scanner in mid-2027.
• June 10, 2027: ASML’s Capital Markets Day.
• 2028: xLight’s first prototype is due in Albany. China reportedly aims for functional chips from its EUV prototype. ASML is investigating capacity increases beyond 30% for 2028.
• 2029 and 2030: Some ASML customers have expressed interest in placing orders.
• End of the decade: ASML’s Teun van Gogh said customers should reach around 330 wafers an hour per EUV machine, and ASML aims for a 1,000 W source.
• Stated by companies, without fixed dates: Substrate’s CEO said in October 2025 that first processors need three years. Langdao Silex staff expect mass production of its light source in three to five years. Canon aims to sell 10 to 20 nanoimprint tools a year within three to five years of its 2024 report.

Sources and notes

ASML: Q3 2026 results, Q3 presentation and Q2 2026 results (SEC filings). ASML technology pages: light and lasers, lenses and mirrors, mechanics and mechatronics, measuring accuracy, pushing k1 further, NXE:3800E, EXE:5200B, NXT:2100i, metrology and inspection and computational lithography. Technology reporting: TrendForce, summarizing Reuters, on ASML’s 1,000 W source; Semiconductor Engineering on High-NA fields and stitching. China: TrendForce, summarizing Reuters; XenoSpectrum on Langdao Silex; TrendForce, summarizing the Financial Times, on Yuliangsheng; CNBC on China’s DUV tool; IO+ on Tsinghua’s SSMB; Techzine on Prinano. US: The Next Web on xLight; Dealroom on Terafab and FEL; Bits&Chips on Terafab; Seedtable on Inversion; SiliconANGLE on Substrate. Japan: Canon and Bits&Chips on nanoimprint; IPS News on Nikon. Company claims are as stated by the companies. Technology descriptions are ASML’s own; spec values that did not render on ASML’s product pages are omitted, and because ASML’s mechanics page gives two different wafer-table accelerations, only the synchronization figures are quoted. The 1,000 W source figures, the China EUV prototype report and the Yuliangsheng report are summaries by TrendForce of Reuters and Financial Times reporting; the originals were not read. The Tsinghua report is from 2023. Terafab’s EUV timing is attributed to unnamed sources, and the Bits&Chips article of October 19 was not read. The Nvidia cuLitho details are from excerpts of 2023 coverage that could not be opened. The sources reviewed contain no report of OpenAI, Anthropic or DeepSeek developing lithography tools, and no 2026 update on Substrate, Inversion or Canon. Graphics: Lens, from ASML’s results and the cited reporting. Thumbnail photo: a photolithography cleanroom at the London Centre for Nanotechnology, University College London, 2013. Photo by UCL Mathematical & Physical Sciences (O. Usher) via Wikimedia Commons, licensed under CC BY 2.0; cropped. Illustrative photo; it does not show ASML’s machines or the companies described.