Elon Musk Needs ASML for Terafab. You Don’t Need ASML Stock in Your Portfolio.

ASML Holding N.V. (ASML) holds one of the most critical positions in the global semiconductor supply chain. As the world’s sole supplier of extreme ultraviolet lithography machines, the Dutch chip equipment giant plays an indispensable role in producing the most advanced chips used in artificial intelligence (AI), high-performance computing, smartphones, data centers, and increasingly, autonomous systems.

That importance was underscored recently when Tesla (TSLA) and SpaceX (SPCX) CEO Elon Musk virtually attended an internal ASML event to discuss Terafab, his ambitious chipmaking initiative. The project is designed to bring advanced semiconductor production deeper into Musk’s industrial ecosystem, supporting future demand from Tesla’s self-driving vehicles, Optimus humanoid robots, and SpaceX’s space-based data centers. More importantly for ASML, any serious effort to manufacture cutting-edge chips will require access to the company’s extreme ultraviolet lithography systems—the machines widely regarded as the most critical tools in advanced semiconductor production.