AINEWS
A 25,000 square meter Zeiss expansion, four years in the making, is the only physical lever on the constraint ASML, the maker of every advanced chip making machine, says it could not survive losing.
The optical heart of the machines that print the world's most advanced microchips is built in only two places on Earth: Oberkochen and Wetzlar, in southern Germany. A 25,000-square-meter expansion in Oberkochen, just opened four years after the 2022 groundbreaking, is the only physical lever ASML, the Dutch company that builds those machines, has on the constraint its own annual report says it could not survive losing.
Carl Zeiss SMT, the division that supplies the optical columns inside ASML's extreme-ultraviolet lithography scanners, has moved staff into the first completed building of the Oberkochen site this month, per trade coverage of the opening. The remaining buildings will be handed over in stages over the coming years. Four years passed between the original groundbreaking and the first staff moving in. The gap says less about German construction and more about what has to be installed before anyone can work there.
The product is not a chip. It is a stack of mirrors, lenses, and illumination optics so large that High-NA projection optics alone contain more than 40,000 parts and weigh about 12 tons, roughly seven times the volume and weight of standard EUV optics, according to the same reporting. The illumination system adds another 25,000 parts and 6 tons. The mirrors themselves run to several hundred kilograms each, about twice the size and ten times the weight of current EUV mirrors, and are machined for months. Verifying them requires a vacuum chamber five meters by ten meters, built from more than 100,000 parts and weighing more than 150 tons. The physics of extreme-ultraviolet light, which prints the smallest features on advanced chips, demands this.
ASML's 2025 annual report states that the number of EUV scanners the company can ship is "limited by Carl Zeiss SMT's production capacity" and describes Zeiss SMT as the sole supplier of EUV optical components under an exclusive arrangement. The same filing says a prolonged Zeiss disruption would prevent ASML from shipping product, and that without the relationship, ASML "would effectively cease to be able to conduct our business."
The money matches the constraint. ASML reported purchases from Zeiss SMT and its subsidiaries of €4.41 billion in 2025, about $5.03 billion at the 1.14 USD/EUR rate the company uses, up from €3.95 billion in 2024 and €3.33 billion in 2023. That is a roughly 32% ramp in three years, the spending curve of a customer that cannot easily switch suppliers and is paying for the expansion it needs.
ASML has told investors what the expansion is for. On the company's July 2026 earnings call, executives said the company plans to lift Low-NA EUV scanner output by roughly 30% in 2027, off a base of about 65 systems this year, and is "close to fully booked" on Low-NA EUV for 2027. Management is also evaluating another 30% step for 2028. CFO Roger Dassen told the call the company is compressing its scanner build cycle from about 22 weeks toward 15 to 16 weeks, which functions as a second lever on throughput while the optics line scales.
The same bottleneck that enables more AI-chip output also concentrates pricing power in a single German site and its Dutch customer. Trade press has described ASML as planning Low-NA EUV price increases that have upset TSMC, the world's largest contract chipmaker. ASML has not publicly confirmed the specific figures, and TSMC's reaction is described in coverage as "reportedly" upset rather than on the record. The friction is real even without a clean quote. When a customer cannot switch suppliers and demand is strong, prices rise and customers push back, and the pushback shows up in earnings-season coverage and industry chatter before it shows up in a filing.
That is what the building opening is for. Whether the second 30% step in 2028 is realistic depends on whether the rest of the Oberkochen site comes online on schedule and whether the 15-to-16-week build cycle holds at the new target. ASML's October 2026 earnings call will be the first public read on both. If they hold, the world gets more AI accelerators per quarter. If either slips, the constraint that lives in two optical buildings in Baden-Württemberg becomes the rate limit on advanced chip production, no matter how many fabs TSMC, Samsung, and Intel are willing to run.