The commercial agreement signed by Donald Trump , the president of the USA, and Ursula von der Leyen , the president of the European Commission , at the end of last week establishes that most of the products imported by the US and manufactured by Europe will have a 15% tariff. However, strategic products will not be subject to any tariffs. Among these strategic products are the photolithography systems designed and manufactured by the Dutch company ASML , which play a crucial role for both Europe and the United States.
“We have agreed to zero tariffs for a series of strategic products,” clarifies the European Commission statement. “In this agreement, all aircraft and their components are included, as well as some chemicals, generic components, semiconductor equipment, agricultural products, natural resources, and critical raw materials. We will continue working to add more products to this list.”
The US is a highly significant market for ASML, making this exemption from tariffs especially beneficial. Renowned companies such as Intel , Globalfoundries , Micron Technology , Texas Instruments , Samsung , and TSMC rely on ASML’s technology. Notably, although Samsung and TSMC are not American companies, they operate chip factories within the US. The exemption from tariffs is critical for these businesses and ASML, as the company is the sole manufacturer of Extreme Ultraviolet Lithography (EUV) machines. These advanced machines are essential for producing cutting-edge chips at some of their manufacturing facilities.
For ASML, Your Effective Monopoly is Everything
ASML’s monopoly in the photolithography market is practically unmatched since its introduction of the first EUV machine. Competitors such as Canon and Nikon , both established Japanese companies, have attempted to develop similar machinery but have failed to achieve that goal. The extensive technical and financial resources needed to create a competitive product were so immense that they chose to withdraw from the competition altogether. This has given ASML a clear path to dominate the market. Currently, the most advanced semiconductor manufacturing machinery found in the facilities of TSMC, Intel, Samsung, and SK Hynix is produced by ASML.
Currently, Canon is working on a nano-imprint lithography system aiming to compete head-to-head with ASML’s EUV machines. However, as of now, it remains uncertain whether this new technology will rival ASML’s most advanced equipment : the High-NA EUV machine. Presumably, this machine will enable the production of chips of less than 1 nm before the decade concludes.
The most advanced chips manufacturing machines found in TSMC, Intel, Samsung, or SK Hynix are produced by ASML.
The EUV photolithography equipment provided by ASML is incredibly sophisticated. The most advanced artificial intelligence GPUs from NVIDIA , the most powerful System on Chip (SoC) from Apple , and high-performance CPUs from AMD all owe their existence to ASML’s technology. It’s essential to note that while these companies design their chips, they do not manufacture them; that role falls to TSMC , which utilizes ASML’s EUV lithography machines.
ASML’s journey to innovation has not been solitary. One of its critical partners is the American firm Cymer , established in 1986, specializing in the production of lasers and extreme ultraviolet light sources (EUV). The collaboration between Cymer and ASML spans many years, culminating in ASML acquiring the San Diego-based company in 2013. The aim was to accelerate the advancement of technologies integral to EUV lithography.
Another pivotal ally of ASML is the German company Zeiss , known for its optical systems. The intricate transport of ultraviolet light from the source to the silicon wafer is achievable primarily due to the mirrors designed and manufactured by Zeiss. These vital optical components facilitate the transition of EUV light, which operates at a wavelength of 13.5 nm, from the source to the mask containing the geometric patterns required for silicon wafer translation.
Image | ASML
More Information | European Commission
In the fast-evolving world of chip manufacturing, partnerships and strategic agreements date back several years, shaping the direction and dominance of technology sectors across continents. The collaborative efforts and technical prowess of companies like ASML place them at the forefront of the future of technology.