AI is the new driver of the semiconductor industry, demanding a 16x increase in transistor density every two years, which will force major changes in chip design for both logic and memory.
EUV lithography is absolutely essential for manufacturing advanced logic chips economically and in high volume; there is no viable alternative.
Government subsidies like the CHIPS Act are a short-term solution that fails to address the fundamental cost disadvantages of manufacturing in the West, risking long-term uncompetitiveness.
China is technologically contained in semiconductor manufacturing, lagging 10-15 years behind the leading edge due to its lack of access to EUV machines.
The core principle of Moore's Law, increasing transistor density, is not dead and will continue to be actively executed by the industry for at least another 20 years.
Over 20 years ago
ASML began the foundational research for EUV technology, a process that would take over two decades to reach economic viability.
Over 15 years ago
ASML initiated a period of intense investment, ultimately spending over $6 billion to develop its EUV lithography systems, in close partnership with optics company Zeiss.
Pre-launch of 7nm/5nm nodes
A co-investment program with key customers like TSMC, Intel, and Samsung accelerated EUV development by an estimated three to five years, enabling its market readiness.
7nm/5nm node transition
TSMC's decision to adopt EUV technology while Intel did not created a significant competitive gap, cementing EUV's status as an essential technology for leading-edge chipmaking.
Present
Fouquet states that demand for chips, supercharged by AI, is outpacing supply, causing customers to accelerate capacity expansion plans for 2026 and beyond.
Next 20 years
Fouquet predicts that the trend of increasing transistor density, in line with Moore's Law, will continue for at least another two decades.
▶The Indispensability of EUV LithographyApr 2026
Fouquet positions ASML's EUV technology as the non-negotiable foundation for modern, leading-edge semiconductor manufacturing. He details the immense, multi-decade, multi-billion dollar investment required to develop it, including a critical partnership with Zeiss, and points to its adoption by TSMC as the key differentiator in its competition with Intel.
For investors, this theme reinforces ASML's deep technological moat and near-monopolistic position at the most critical chokepoint in the advanced semiconductor value chain, making its technology a prerequisite for any entity with leading-edge ambitions.
▶AI as an Accelerator for Moore's LawApr 2026
According to Fouquet, the demands of AI are fundamentally reshaping the trajectory of semiconductor development. He claims AI hardware developers now require a 16-fold increase in transistor density every two years, dwarfing the traditional doubling of Moore's Law, while also necessitating future chip designs to be re-architected specifically for AI workloads.
This signals a massive and sustained demand cycle for ASML's most advanced equipment, as the entire industry must retool and innovate at an accelerated pace to meet the computational needs of the AI era.
▶The Structural Economics of Global Chip ManufacturingApr 2026
Fouquet consistently emphasizes the underlying economic realities that govern semiconductor manufacturing. He argues that government subsidies like the CHIPS Act are temporary fixes that fail to address the structural cost disadvantages of operating in the US and Europe compared to Asia, warning that geopolitical decoupling will inevitably increase costs.
Analysts should be cautious about the long-term viability and cost-competitiveness of Western semiconductor fabs, as Fouquet suggests that without addressing operational cost structures, they will struggle to compete with Asian counterparts after initial subsidies run out.
▶Geopolitical Technology Gaps and ControlsApr 2026
Fouquet provides a clear assessment of the current geopolitical landscape in semiconductors, specifically quantifying China's capabilities. He states that the lack of access to EUV technology places China's semiconductor manufacturing 10 to 15 years behind the leading edge, making it a critical chokepoint for China's technological ambitions.
This highlights the effectiveness of technology controls centered on lithography and suggests that China's path to semiconductor self-sufficiency at the leading edge is blocked for the foreseeable future, solidifying the technological advantage of nations with EUV access.