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ASML adopts horizontal specialization model to lead AI semiconductor era over Nikon and Canon

Tuesday, February 24, 2026 at 08:21 PM

ASML has surpassed Nikon and Canon in the photolithography market by utilizing an external procurement strategy for components, whereas the Japanese competitors maintain a vertically integrated model by developing and manufacturing optics in-house.

Context

ASML secured a decisive lead over Nikon and Canon by adopting a horizontal integration model that prioritizes strategic partnerships over traditional in-house manufacturing. While Japanese rivals struggled with vertical integration, ASML collaborated with specialists like Carl Zeiss and acquired key players such as Cymer in 2013 to accelerate the development of Extreme Ultraviolet (EUV) technology. This shift began with the 2001 acquisition of SVG, a move that industry experts believe effectively ended Nikon’s ability to compete in the high-end lithography race. Today, ASML holds a 100% market share in EUV lithography, making it the sole gatekeeper for advanced AI chip production. While ASML reported record annual revenue of €27.6 billion in 2023, its Japanese competitors have been largely relegated to older DUV and niche segments. By controlling the supply chain’s most critical bottleneck, ASML remains indispensable to the manufacturing of sub-5nm logic and memory chips essential for modern AI infrastructure.

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