As of Wednesday, June 3, ASML's market capitalization reached $668 billion, making it the most valuable company in European history, surpassing Novo Nordisk's record of $650 billion set in June 2024. The Dutch company is the sole supplier of extreme ultraviolet (EUV) lithography machines used by companies such as TSMC, Samsung, and Intel to print advanced logic chips. Previously, JPMorgan Chase and Morgan Stanley released almost identical reports indicating that ASML's production capacity far exceeded market expectations, causing ASML's stock price to rise.

On the same day, two banks raised their target prices for ASML: JPMorgan Chase raised it from €1,515 to €1,900, and Morgan Stanley from €1,400 to €1,660, both maintaining an "overweight" rating.

JPMorgan analyst Sandeep Deshpande believes that ASML can deliver more than 110 low-number-aperture EUV lithography systems without adding new capacity, far exceeding the upper limit of approximately 90 systems previously predicted by investors, and also exceeding the company's recent production levels.

EUV lithography technology

EUV lithography is crucial for the chip industry, as it remains a major bottleneck in the supply of advanced chips. Every cutting-edge silicon wafer used to train and run artificial intelligence models must pass through an ASML scanner at some point; therefore, the higher the shipment volume, the greater the capacity of downstream foundries.

Morgan Stanley stated that its increased confidence in recent shipment volumes stems from ASML's remarks at its annual shareholder meeting in April. ASML outlined its expansion plans for its Brainport industrial park in Eindhoven, with construction scheduled to begin in the third quarter of 2026. The bank cautioned that the park "needs to be the start of a multi-phase construction" to fully alleviate capacity concerns.

Ironically, ASML's performance has even fallen short of the standards set by its suppliers. Its market capitalization has yet to break the trillion-dollar mark, a milestone already achieved by several other US chip companies. ASML's stock price increase of approximately 50% this year also lags behind the overall semiconductor industry, which has outperformed due to strong growth in demand for artificial intelligence. ASML had previously surpassed SAP to become Europe's most valuable publicly traded company, and its market capitalization now exceeds the combined market capitalization of the second and third largest companies in Europe - HSBC and Roche.

While the company currently holds a dominant position, its long-standing dominance is not secure; several companies are now attempting to challenge its position. Substrate, a San Francisco-based startup backed by Peter Thiel's Founders Fund and In-Q-Tel, a company with ties to the CIA, has raised $100 million to develop a particle accelerator X-ray lithography system. Substrate claims its system can pattern 2-nanometer features at a cost of approximately $10,000 per wafer, compared to approximately $100,000 for its current state-of-the-art EUV lithography technology. Canon has also begun shipping commercial nanoimprint tools, Nikon has launched a low-end product, and China claims to have a solution that can replace ASML's equipment.

None of these devices are likely to replace EUV scanners in high-volume logic circuits in the near future. ASML's tools range in price from about $235 million for low-NA systems to about $380 million for the high-NA EXE:5200B, which Intel installed for its 14A node late last year.

Source: Compiled from tomshardware

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