ASML CEO Christophe Fouquet on his company’s exclusivity: no one will fight for us

Every time you use AI, in some small way, it depends on the 42-year-old, 44,000-person Dutch company that spends €4.5 billion each year to develop its technology.

ASML, headquartered in the Netherlands, makes the machines that make the chips that make AI possible. Specifically, it makes the only machines in the world capable of printing very small patterns on silicon wafers that define the most advanced semiconductors – a process called extensive ultraviolet lithography, or EUV. The machines are about the size of a school bus, take months to assemble, involve hundreds of suppliers, and cost anywhere from $200 million to upwards of $400 million each depending on the generation (prices that give even ASML’s biggest customers pause).

That dominance made ASML the most valuable company in Europe, worth more than $530 billion. And with the four largest American technology companies – Microsoft, Meta, Amazon, and Google – spending more than $600 billion on AI infrastructure this year alone, the demand for ASML machines has grown to the point where the company openly states that the world will not have enough chips for years.

All that demand made ASML a target. Substrate, a San Francisco startup founded by Peter Thiel’s backer, has raised more than $100 million and been valued at more than $1 billion on the claim that it can build a rival lithography machine. Separately, there have been reports that ASML’s former developers in China have partially rolled back the technology, a prospect with major implications for the country.

Christophe Fouquet, who became ASML’s CEO in 2024 after more than a decade at the company, sat down with the editor on the roof of his Beverly Hills hotel Tuesday morning before his appearance at the Milken Institute Global Conference. Dressed in a blue suit and white shirt, he was relaxed – even when the conversation turned to rivals.

This interview has been slightly edited for length and clarity.

Did you see the AI ​​explosion coming?

No, it’s not. We worked hard, but not with the idea that this would come. He went from an idea – something people thought would eventually come – to ChatGPT, which was the first great example of what AI could do. And now I think we are looking at AI as the next revolution, not only for industry but also for society. Did I see it coming? No, we sit in the middle of it every day, sometimes we wake up in the morning and we’re still looking at what’s really going on.

The biggest question everyone has is whether the supply chain can keep up with demand. Can it?

Demand is such that the market as a whole will have limited supply for a while. Currently, the biggest hurdle seems to be in chip production. We, as equipment suppliers, follow our customers, and so far we have followed them very well — but we know that we have to strengthen our entire supply chain and capacity. If you talk to hyperscalers, I think they will tell you that in the next two, three, or five years, they won’t get enough chips.

TSMC has made news recently saying that its latest devices are very expensive. How do you react?

The EUV system, if you look at the price, will be more expensive than the low NA system, but the cost of making a wafer with this tool in some advanced layers will be expensive. We can get 20%, 30% off the cost.

[Editor’s note: Both machines Fouquet is referring to here are EUV machines — the same fundamental technology. NA stands for numerical aperture, a measure of how finely a machine can focus light onto a chip. Low-NA EUV is the current generation; high-NA EUV is ASML’s newest generation, capable of printing even finer patterns but carrying a price tag of $350 million or more apiece. Fouquet is arguing that even though the new machine costs more, it produces chips more cheaply.]

I get a lot of questions about whether it will be this month or next month or the month after. And I usually say it doesn’t really matter, because we’ve designed the top NA for the next 10, 20 years. You can go back to the newspapers from 2016, 2017, and you will find the same quotes – lower NA EUV was more expensive. We know what happened after that. The same will happen with high NA.

There’s a startup called Substrate, backed by Peter Thiel, who says it can build a rival lithography machine. What do you think about it?

Wanting to have it and having it – that’s still a big difference. The challenges of lithography are many. Being able to make an image is a start, but you need to make that image at the highest rate, at the lowest cost, at the highest speed, and with nanometer precision. I always say that the only reason ASML can build an EUV machine is because 80% of it already exists, based on previous knowledge and products developed over time. We had to solve one problem – getting EUV light – and that alone took 20 years. When you start from scratch, the challenge is huge. I have seen many claims. I saw a few pictures. But we had our first EUV image 30 years ago, and we still needed 20 more years of hard work to turn it into a production system.

How about xLight, a laser startup partially backed by the US government that wants to work with you?

xLight focuses on one element of our EUV machine — the light source. The resource we have can be extended for many years to come, and we know how to measure it. What xLight does is a new source that has yet to be developed and proven. The only question is whether it provides performance or cost benefit over what we have. I think the jury is still out. We work with them so they can demonstrate their expertise — we feel that’s a responsibility on our part. But it’s still a long way to go.

There are also reports that former ASML developers in China have hacked your devices.

To reverse engineer anything, you first need to have a device. And there is no EUV machine in China – we have never sent equipment there. All the tools we sent, we know where they are. Either they are used with customers, and we track them, or they are dismantled and returned to us. The idea that one of our programs is in China is wrong. And because our EUV technology has not been sent there, and we don’t have people in China trained in EUV.

At the very beginning, when the restrictions came in, we created a complete division within the company between those who had access to EUV technology, documentation, and training, and those who could not. Our team in China sits on the other side of that line. The facts point to very little, if any, progress. It is difficult for people to accept that because access to this technology is very important.

On export controls at large – Jensen Huang was here last night arguing that companies should sell internationally, that more corporate income means more tax dollars in the home country of the company. He also said that the important thing is to keep the best and latest close to home. Do you agree?

I think you are right. What he adds – and I think this is what Nvidia has done – is that you can maintain a technological advantage by maintaining a generation gap in what you sell. Nvidia sells several generations back, and that allows them to find a balance between doing business and not providing a strong competitive advantage in countries where you can’t sell the latest. We believe the same approach should apply to our products. Today we export tools to China – allowed by export controls – but the tool we started exporting in 2015. If you apply Jensen’s philosophy to our case, Nvidia is working with about an eight-generation gap. We are looking at two or three. There is a balance — finding the right balance between doing no business at all, losing a huge opportunity, and strongly inviting others to compete with you.

How do you assess where things stand with the current administration in all this?

There is good dialogue, which is very important. I think there is a real understanding of what the business needs, but there is still the challenge of finding the right balance between all the different voices and interests. The conversation is there, and we appreciate that. I have been to Washington many times. At least the conversation is happening. But it is a very complicated topic.

You don’t seem to be worried about someone interrupting your technology.

People love to have the greatest technology, but they often forget what it took to create it. It has been many years of work – not only for ASML but also for our suppliers. Many different groups of people solve very difficult problems, and then one company brings it together using decades of lithography expertise to turn it into a production system. This is not easy at all. And I think that’s also our best defense. That’s all it took to put it together.