ASML CEO Christophe Fouquet on his own company: no one is coming for us

Every time you use AI, you are, in a small way, adopting a 42-year-old, 44,000-person Dutch company that spends €4.5 billion every year on developing its technology.

ASML, based in the Netherlands, makes the machines that make the chips that make AI possible. Specifically, it creates the only machine in the world that can print tiny patterns on silicon wafers that define high-quality semiconductors – a process called extreme ultraviolet lithography, or EUV. These machines are about the size of a school bus, take months to assemble, involve hundreds of suppliers, and cost anywhere from $200 million to $400 million per generation (prices that even ASML’s. major customers have stopped sometimes).

This autonomy has made ASML the most important company in Europe, worth more than $530 billion. And with America’s four largest tech 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 has publicly stated that the world won’t have enough chips for decades.

All this demand has also made ASML a target. Substrate, a San Francisco startup founded by a protégé of Peter Thiel, has raised more than $100 million and has been valued at more than $1 billion for its ability to produce lithography machines. Separately, there have been reports of former ASML engineers in China as well back-engineer skillsa prospect with great political significance.

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

This interview has been lightly edited for length and clarity.

Did you see the AI ​​explosion coming?

No, no. We worked very hard, but not with the idea that this would happen. You went from an idea – something that people thought would come – to ChatGPT, which was really the first good example of what AI could do. And now I think we look at AI as the next revolution, not just in industry but in society. Did I see it coming? No. Being in the middle of it every day, sometimes we wake up in the morning and still look like what is happening is really happening.

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

What is important is that the market as a whole will remain unbounded for a long period of time. Right now, the biggest problem seems to be making the chip. We, as equipment suppliers, follow our customers, and so far we have been following them very well – but we know that we have to increase all our efforts. If you talk to hyperscalers, I think they will tell you that for two, three, even five years, they won’t get enough chips.

TSMC recently released an article saying that your latest machine is too expensive. How do you respond?

The EUV system, if you look at the price, will be more expensive than the NA system, but the cost of making a combination with this tool at some higher levels will be cheaper. We can get 20%, 30% price reduction.

(Editor’s note: Both machines that Fouquet is referring to here are EUV machines – the same basic technology. NA stands for numerical aperture, a measure of how well the machine can focus light on a chip. Low-NA EUV is the current generation; high-NA EUV is the newest generation of ASML, capable of printing even about 50 million tons or carrying tons of about $500000. Arguing that although these new machines cost more, they make cheap chips.)

I get a lot of questions about whether it will be this month or next month or the month after. And I often say that it doesn’t matter, because we created NAs for the next 10, 20 years. You can go back to the files from 2016, 2017, and you will find the same statement – low-NA EUV was very expensive. We know what happened after that. The same will happen with the senior-NA.

There’s a startup called Substrate, backed by Peter Thiel, claiming it could build a lithography machine. What do you think about it?

Wanting to have it and having it – that’s a big difference. The problems of lithography are many. Being able to create an image is a start, but you need to create the image in large quantities, at very low cost, at high speed, and with nanometer precision. I always say the only reason ASML can build an EUV machine is because 80% of it already exists, based on past knowledge and products that have been developed over time. We had to solve one problem – getting the EUV light – and that alone took 20 years. When you’re just starting out, the challenges are huge. I have seen many claims. I have seen several pictures. But we had our first EUV photo 30 years ago, and we still needed 20 years of hard work to turn it into a production process.

How about xLight, a laser starter sponsored by the US government Want to work with you?

xLight focuses on one aspect of our EUV system – the source that produces the light. The resource we have can be expanded for many years to come, and we know how to expand it. What xLight is doing is a new resource that needs to be built and validated. The only question is whether it offers more functionality or value than what we have. I think the jury is still out. We are working with them so that they can demonstrate their expertise – we see it as our responsibility. But there is still a long way to go.

There are also reports that former ASML engineers in China have completely modified your machine.

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

Early on, when the restrictions came, we created a complete separation in the company between those who could access EUV technology, documents, and training, and those who could not. Our team in China is on the other side of the line. The facts point to little progress, if at all. It is difficult for people to accept this because acquiring this skill is very important.

On export control seriously – Jensen Huang was here last night arguing that companies need to sell globally, that more business investment means more tax money in the company’s home country. He said the important thing is to keep the best and latest close to home. Do you agree?

I think he is absolutely right. What they’re adding – and I think this is what Nvidia has done – is that you can maintain technological advantage by maintaining a generational gap in what you sell. Nvidia sells several generations back, and this allows them to find a balance between staying in business and not giving a competitive advantage to countries where you will not sell the latest. We believe that the same approach should be applied to our products. Today we export equipment to China – authorized by export controls – but it is the equipment that we first exported in 2015. If you apply Jensen’s philosophy to our situation, Nvidia is working with about eight generations. We are looking for two or three. There is room for imagination – finding the right balance between not doing business at all, losing big opportunities, and strongly inviting others to compete with you.

How do you see the situation with the management here in all of this?

There is a good dialogue, which is very important. I think there is a real understanding of what the business needs, but there is still a problem of finding balance between different voices and interests. Discussions are available, and we appreciate that. I have been to Washington many times. At least the conversation is happening. But it is a very difficult matter.

You don’t seem to be worried about anyone hacking your technology.

People love to have the best technology, but they tend to forget what it took to build it. There have been many years of service – not only at ASML but also with our suppliers. Many different groups of people are solving very complex problems, and then one company is bringing it all together using decades of technology to turn it into a manufacturing machine. This is not easy at all. And I think he’s also our best defense. It’s just what it took to put it together.