Three Customers for the FlagshipNarrow moat
ASML (ASML) — moat facet
A monopolist whose revenue depends on five capital budgets is powerful and not in control.
The addressable market for ASML's most advanced tools is not a market in the usual sense. Three companies manufacture leading-edge logic. Add the leading memory manufacturers and the total population of organisations that can use an EUV machine is roughly five.
This produces the strangest economics in the collection. ASML has absolute pricing power — a machine costs €200 million or more, with High-NA systems considerably higher, and there is no alternative at any price. It also has almost no ability to grow by finding new customers, because the barrier to becoming one is a fab costing tens of billions. Growth therefore comes from selling more machines to the same buyers, at higher prices, plus the service annuity on the installed base.
It also means ASML's revenue is a second derivative of demand for chips. The customers' capital spending decisions — made annually, revised often, and driven by their own view of a cyclical end market — determine ASML's year. A monopolist whose revenue depends on five capital budgets is powerful and not in control.
Watch aggregate leading-edge capital spending rather than ASML's own bookings. Bookings tell you what has been ordered; customer capex plans tell you what will be, and in a business whose two largest buyers are 38.0% of net sales1 those plans are public and specific.
Roughly five organisations on earth can use ASML's most advanced machine, and the barrier to becoming a sixth is a fab costing tens of billions. That produces absolute pricing power and almost no ability to grow by adding customers. Unchanged, and unlikely to change in either direction.
Only a handful of chipmakers can use an EUV machine, so capacity plans reflect their orders directly. A plan to add 30% says those few customers are expanding; a reversal would show the concentration cutting the other way.
Source: ASML Q2 2026 results ↗- ReportedASML's sales remain concentrated among a limited group of customers, with the two largest at 38.0% of net sales.ASML Form 20-F, FY2025 — total net sales to the largest customer amounted to EUR 7,796.7 million, or 23.9% of total net sales in 2025, compared with EUR 4,682.4 million, or 16.6%, in 2024; in 2025, 38.0% of total net sales were made to the two largest customers; while the ranking of the largest customers may shift year to year, sales remain concentrated among a limited group, and the loss of any key customer or a substantial change in their purchasing behaviour could have a material adverse effect; metrology and inspection customers largely overlap with those purchasing lithography systems — FY2025 (ended December 31, 2025) · publ. February 25, 2026 · source ↗