As artificial intelligence companies scramble for the NVIDIA chips essential to powering the AI boom, the Dutch firm ASML has secured a critical position in the supply chain—manufacturing the core equipment, which requires matching laser systems, used for chip lithography. ASML's clientele includes companies like Taiwan Semiconductor Manufacturing Company and Intel; its massive, precision equipment etches microscopic circuits onto silicon chips, dominating the market for the supporting equipment needed for high-end microprocessors required by AI. Since last April, shares of this Veldhoven, Netherlands-based company have doubled, with a 25% surge this month alone; this rally comes as its chip manufacturing customers ramp up investments amidst a chip supply shortage that is driving up prices. Analysts indicate that as the company prepares to release its earnings report on Wednesday, investors are closely watching to see if it will raise its forecast for 2026 sales, which currently projects figures to be flat to slightly higher. With the company's stock price climbing steadily, analysts have been raising their performance expectations, and the latest projections now significantly exceed the company's own guidance. In the global artificial intelligence arms race, which has spawned trillions of dollars in value, ASML has successfully hitched a ride on the rapid growth of chip design giant NVIDIA, thanks to its exclusive monopoly on EUV technology. John West, an analyst at semiconductor consulting firm Yole Group, stated that for EUV, ASML "is the only option in the industry." The wavelength of the light beam used in extreme ultraviolet lithography is a mere 13.5 nanometers, which is incredibly minute—for context, a single human hair is approximately 80,000 to 100,000 nanometers in diameter. ASML's chip manufacturing customers are increasing their capital expenditure plans. ASML will also provide an update on its equipment capacity expansion plans. Bolstered by robust demand for its high-tech equipment, ASML has become Europe's highest-valued listed company, recently surpassing a market capitalization of $500 billion. Analysts estimate that, leveraging the advantages of its high-productivity equipment, ASML commands approximately 90% of the market for lithography systems and is also the sole supplier of extreme ultraviolet lithography technology. This technology generates the necessary lithography light source by using lasers to strike tin droplets 50,000 times per second, vaporizing them. In 2025, a surge in demand for AI-related cloud services, and the resulting memory chip shortage, has begun to drive up prices for smartphones, computers, and gaming consoles. To address this situation, chip manufacturers are increasing investments to expand production capacity. According to London Stock Exchange Group data, ASML's largest customer, TSMC, plans to increase its capital expenditure by 37% to $56 billion by 2026; Samsung aims for a 24% increase to $40 billion; SK Hynix plans a 25% rise to $22 billion; and U.S. firm Micron Technology intends a significant 45% boost to $20 billion. Analysts estimate that about 25% of chipmakers' capital expenditure is allocated to lithography equipment purchases, with the majority flowing to ASML; furthermore, driven by demand from companies like Apple, Google, and Qualcomm, the proportion of lithography equipment spending related to AI chips could be even higher. Kevin Wang, an analyst at Mizuho Securities, stated, "We anticipate there is also room for growth in the company's business in China for 2026." Maintaining an industry-leading advantage. Although ASML faces competition from Japan's Nikon and Canon, as well as China's Shanghai Micro Electronics Equipment (SMEE) in the DUV market, industry experts say that even as both the U.S. and China strive to catch up, ASML's dominance in high-end chip lithography will likely persist for several more years. Dan Hutcheson, a senior analyst at TechInsights who has followed the company since its spin-off from Philips in the 1980s, pointed out that the chip industry is currently investing tens of billions of dollars to advance the deployment of ASML's next-generation lithography equipment. He stated that switching technological paths at this point would be akin to changing an engine in the middle of a Formula One race. "The entire supply chain is betting on the technology direction for the next 5 to 7 years, staking their entire fortunes," he added, noting that with hundreds of billions of dollars at stake, companies simply cannot afford to switch suppliers. "Who would actually risk losing everything by choosing the wrong lithography equipment?"