Nvidia Corp (NVDA)'s AI empire has made the chip designer one of the most important companies in the market. But follow the supply chain one step further and the story leads to a Dutch company with a monopoly of its own.

ASML Holding N.V. (ASML) makes the most advanced EUV (extreme ultraviolet) machines needed to manufacture the chips powering increasingly complex AI systems.

Follow Nvidia to TSMC

Investors first learned to look beyond Nvidia when the AI chip boom made Taiwan Semiconductor Manufacturing Company Ltd. (TSM) a critical part of the story. ASML CEO Christophe Fouquet says the next question is even more revealing: How does TSMC make those chips?

The answer leads to ASML.

Fouquet told the Financial Times that investors who initially focused on Nvidia's chip designs eventually recognized TSMC's role in manufacturing them. Then they discovered that TSMC relies on ASML's EUV lithography machines for the most advanced chip production.

ASML has a total monopoly on the most advanced EUV machines, which are essential for producing chips used in complex AI applications.

That puts ASML in a very different position from the more visible AI winners. Nvidia designs the chips. TSMC manufactures them. ASML supplies the machines that make that manufacturing possible.

The $400 Million Machine

The scale of ASML's technology helps explain why the company is so difficult to replicate.

An EUV machine can cost roughly $400 million and is about the size of a double-decker bus. It uses lasers, mirrors, vacuum systems and short-wave light to print increasingly small circuits onto silicon wafers.

But the price tag may actually undersell the complexity.

An ASML EUV machine contains more than 100,000 parts, supplied by 200 principal suppliers and roughly 2,000 companies across the broader ecosystem. Fouquet says that complexity has become an advantage because ASML can work with specialist companies rather than trying to manufacture everything itself.

Companies including Zeiss, Trumpf and VDL supply critical components, while ASML has acquired or invested in selected suppliers when needed to protect the technology chain.

The AI Trade Goes Deeper

That makes ASML an unusual AI infrastructure play.

Its importance does not come from selling AI models, designing GPUs or operating data centers. It sits further upstream, providing equipment that enables the production of the advanced chips those businesses depend on.

Fouquet also expects the AI cycle itself to remain substantial. He estimates the technology's effect on society and industry could last 10 to 15 years, saying the world is still seeing only the "tip of the iceberg."

For investors, the Nvidia story therefore has another layer. The AI hardware chain does not end with the chip designer or the chip foundry. It reaches back to a Dutch equipment maker whose technology has become one of the industry's hardest-to-replace links.