ASML's EUV Monopoly Powers Nvidia's AI Empire

Nvidia's dominance in the AI market has led investors to overlook another crucial player in the supply chain. ASML Holding N.V., a Dutch company, holds a monopoly on the most advanced EUV (extreme ultraviolet) machines used to manufacture chips powering complex AI systems.

ASML CEO Christophe Fouquet explained that while Nvidia designs the chips and TSMC manufactures them, ASML's technology is essential for producing those chips. An EUV machine can cost around $400 million and contains over 100,000 parts supplied by numerous companies across the ecosystem.

Fouquet noted that this complexity has become an advantage for ASML, allowing it to work with specialist companies rather than manufacturing everything itself. This makes ASML an unusual AI infrastructure play, sitting further upstream in the production process.

ASML's importance is not limited to its technology; Fouquet estimates that the impact of AI on society and industry could last 10-15 years, with the world only seeing 'the tip of the iceberg' so far.