To etch circuit patterns onto silicon wafers at the nanometer scale requires photolithography machines. For the most advanced chips — anything below 7 nanometers — there is exactly one supplier on the planet: ASML, a Dutch company based in Veldhoven.

ASML holds an absolute monopoly on extreme ultraviolet (EUV) lithography. However, most semiconductors — including chips for cars, appliances, and industrial equipment — don't require leading-edge nodes. For these mature processes, Japan's Nikon and Canon, along with equipment makers like Tokyo Electron, serve a competitive market. ASML's monopoly applies specifically to the frontier.

China has been developing its own EUV capabilities, with reports in late 2025 of a prototype machine. However, experts do not expect it to produce working chips at scale until 2028–2030 at the earliest. Dutch export restrictions, in place since January 2025, block Chinese access to ASML's systems.