Even the Chip Industry’s Strongest Monopoly Can’t Afford Complacency in 2025

The throne isn't as comfortable as it looks.

The Illusion of Invincibility

Market dominance creates its own vulnerabilities. Every bottleneck becomes a target, every pricing decision a rallying cry for competitors. The very scale that defines a monopoly also slows its reflexes—while agile newcomers chip away at the edges.

Innovation's Double-Edged Sword

Breakthroughs don't just protect moats; they can drain them. Today's proprietary standard is tomorrow's open-source workaround. The R&D budget that once built walls now funds a global race where the finish line keeps moving.

The Regulatory Sword of Damocles

Success attracts scrutiny like honey attracts flies. Antitrust whispers become investigations, investigations become lawsuits, and suddenly that 'natural monopoly' looks decidedly unnatural to regulators with subpoenas and political points to score.

The Talent Drain

Complacency breeds bureaucracy, and bureaucracy drives away the very minds that built the empire. The best engineers don't dream of maintaining legacy systems—they dream of building what comes next, even if that means building it elsewhere.

Supply Chain Serpent

Control is an illusion when your production depends on geopolitical stability, shipping lanes, and minerals dug from contested ground. That intricate web of suppliers? It's not a fortress—it's a house of cards in an earthquake zone.

The lesson for 2025's titans? Monopoly isn't a destination—it's a temporary condition requiring constant, paranoid reinvention. Resting on laurels is a luxury reserved for companies that enjoy being disrupted. Just ask the analysts who've been wrong about 'peak dominance' for three earnings cycles straight—their bonuses depend on it.

$1.4 trillion AI spending spree hinges on ASML

The stakes couldn’t be higher. ASML sits at the center of a $1.4 trillion AI spending spree led by figures like Nvidia’s Jensen Huang and OpenAI’s Sam Altman. Without ASML’s machines, the chip industry grinds to a halt.

“ASML is irreplaceable,” said Chris Miller, a Tufts University professor who wrote Chip War. “Without them, it’s impossible to produce the most advanced semiconductors.”

But investors are getting nervous. Nvidia has shed $700 billion in market value over six weeks as skeptics question whether AI’s massive spending will deliver returns. One unknown: Can Nvidia keep making breakthrough chips? That depends partly on what comes out of Veldhoven.

Fouquet isn’t worried. His company’s work on lithography, light beams that etch intricate patterns on silicon wafers, will support the industry for years, he said.

“We mostly know what to do for our customers for the next 10-to-15 years,” he said. “Better lithography means better resolution, better accuracy and better productivity.”

Chips everywhere, AI everywhere

ASML is riding two massive waves. Chip demand keeps growing as semiconductors spread into cars, consumer gadgets, and beyond. Then ChatGPT’s 2022 debut triggered a race to build AI data centers packed with the most powerful processors, making ASML’s top gear essential.

The numbers tell the story. The global semiconductor market will jump 22% to $772 billion this year and climb more than 25% to $975 billion next year, according to the World Semiconductor Trade Statistics organization.

ASML’s revenue will rise about 15% this year to €32.5 billion. Profit will surge 27% to €9.6 billion. The stock has soared 40% this year, pushing market value to $430 billion, making it Europe’s biggest company. When Fouquet joined the “obscure” business 17 years ago, it was worth less than $10 billion.

The technical knowledge Fouquet built in his early years matters now. He leads executive meetings with CEOs from Intel and TSMC twice yearly, plus biannual technical sessions where chipmakers map production plans 10 years out.

One looming issue is AI’s relentless appetite. The traditional chip industry pace, doubling transistors every two years, known as Moore’s Law, isn’t fast enough anymore. Nvidia wants more.

“They WOULD like the number of transistors to go up by a factor of 16 every two years,” Fouquet said. “So you’re going completely off Moore’s Law.”

China was ASML’s biggest market last year as Beijing builds its domestic chip industry. But export bans block the firm from selling all EUV machines and its most advanced DUV machines to China. Equipment ASML can sell to Chinese customers now lags eight generations behind the latest High NA gear.

The 30-year gamble that created a monopoly

ASML’s dominance stems from a gamble three decades ago on technology even its own engineers thought might fail. Philips and ASM International NV launched the joint venture in 1984, but Japanese rivals Canon Inc. and Nikon Corp. beat them badly.

In the 1990s, ASML and Japanese companies raced to create extreme ultraviolet light for carving circuits. The Japanese quit in the early 2000s, frustrated by costs. ASML kept going with backing from Intel, TSMC, and Samsung. The technology blasts tin droplets with lasers, creating plasma that emits EUV light at 13.5 nm. ASML’s market share jumped from under 40% to 90% last year, said David Dai, an analyst at Bernstein.

Fouquet joined during this breakthrough. Martin van den Brink, then chief technology officer, hired him after a breakfast interview in San Jose. “I found that very unique,” said Van den Brink, who retired last year as ASML president.

ASML put Fouquet in charge of EUV in 2018. Orders more than tripled through 2021.

ASML’s unique technology, locked-in suppliers, and loyal customers have convinced analysts that Fouquet holds the semiconductor business’s most secure monopoly.

JPMorgan Chase & Co. analyst Sandeep Deshpande just made ASML the firm’s top semiconductor pick and raised his 2027 revenue growth estimate to 29% according to a report seen by Bloomberg.

ASML has rivals, but they’re far behind. Shanghai Micro Electronics Equipment, or SMEE, received Chinese government backing to catch up in lithography, but its machines lag ASML’s by 10 to 15 years. Substrate, a Peter Thiel-backed San Francisco startup, announced plans to challenge the Dutch powerhouse with X-ray technology, but production is years away.

“Are we going to see people trying to do lithography? Of course,” Fouquet said. “But that’s very difficult. And the entire ecosystem is very, very dependent.”

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