Semiconductor manufacturing equipment
Equipment makers earn from extending installed tools as well as from new fabs. ASML reported €2.76 billion of second-quarter service and field-option sales, alongside expansion plans. Building equipment, installing it at customers and getting qualified wafers out each take their own time. Naming five big companies does not tell you which process step limits a given chip.
Research snapshot · updated Nov 12, 2026
State of the art (2026)
The oligopoly is compounding, not cresting. ASML closed 2025 with EUR 32.7bn in sales and 48 revenue-recognised EUV systems, recognised its first EXE:5200B High-NA scanner in Q4, and in Q1 2026 raised full-year guidance to EUR 36-40bn while targeting 60-plus EUV shipments. High-NA remains a development tool, not a volume one: Intel installed the first EXE:5200B in December 2025 for 14A, but high-volume manufacturing slips to 2027-2028 and TSMC has chosen to stay on 0.33-NA EUV for A14. The 2026 demand engine is the gate-all-around plus backside-power transition, which lifts etch, deposition and metrology intensity per wafer. Industry wafer-fab-equipment spend is tracking near 135bn USD, with Applied Materials, Lam Research and KLA the prime beneficiaries alongside ASML.
Core thesis
Five companies supply most of the tools used to make advanced chips: ASML, Applied Materials, Lam Research, Tokyo Electron and KLA. Together they sell more than $100 billion of equipment a year. ASML is the only supplier of extreme ultraviolet (EUV) lithography systems, which every chipmaker at the leading edge uses. It also sells the older deep ultraviolet (DUV) systems, and repeated DUV exposures can produce 7nm-class chips at higher cost. Because so few companies make these tools, the US and its allies have used export limits on them to slow China's chipmaking. A large part of the business is servicing and upgrading tools already installed, which brings in revenue between fab-building cycles.
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Signal stack
Evidence stacked leading → lagging
8 signals
Signal stack
Evidence stacked leading → lagging
Technology-native KPIs
Metrics that predict trajectory, tracked over time
4 tracked
Technology-native KPIs
Metrics that predict trajectory, tracked over time
Landscape map
Who builds what, and who depends on whom
59 players · 6 layers
Landscape map
Who builds what, and who depends on whom
Catalyst calendar
Dated events that will move the position
3 ahead
Catalyst calendar
Dated events that will move the position
Technology roadmap
Milestones on the path to maturity
8 milestones
Technology roadmap
Milestones on the path to maturity
Watchlists
Companies, people and papers, each with a condition for removing it
3 · 20
Watchlists
Companies, people and papers, each with a condition for removing it
Decision frameworks
What our view means for your job
Locked
Decision frameworks
What our view means for your job
Thesis changelog
When our view changed, and why
8 updates
Thesis changelog
When our view changed, and why
Change our mind
4 disconfirming conditions
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