Do You Own the World’s Most Powerful Tech Company?

There is a 90% probability that you are reading this material thanks to the electronic circuits created by a uniquely powerful tech hardware firm based in a small town in Holland. With gross profit margins more than 40% sustained over several decades, this Dutch company is protected by a series of almost invincible moats. By joining us in our Global Compounding journey you too could benefit from the uniquely powerful asset that is ASML.

Source: ASML picture featured in wired.com

Given the hype around Nvidia and AI and given the GPU manufacturer’s vertiginous share price rally, you would be forgiven for thinking that Nvidia is the most powerful tech firm in the world. However, most tech experts would say that that honour belongs to a low-profile tech hardware giant based in the small town of Eindhoven in Holland. The company in question is almost certainly responsible for embedding the electronic circuits on your phone and your laptop thus endowing it with processing muscle. The company in question is ASML , the world’s most singular tech company. With a market cap more than $600bn, ASML’s rally over the past four years has enriched many of Marcellus’ clients. The company’s share price has compounded 18x over the past decade and 156x over the past two decades (in rupee terms).

So what does ASML do? And why is it almost impossible for other firms to compete with it?

ASML produces less than one machine per week. These extraordinary machines are called Extreme Ultraviolet Lithography (EUV) machines. Each EUV machine costs around $220m and is the size of a double decker bus (see picture above). Transporting the 100K parts which go into this enormous machine from Holland to the chip foundries in East Asia takes 3 cargo planes.

Once installed in a chip foundry, ASML’s EUV machines then perform a set of manoeuvres which are at very limits of science and human ingenuity. Quoting from a recent FT article:

“Modern chips are made by printing patterns, layer by layer, on to silicon using light.

To do this, engineers first need to create light which does not occur naturally. Powerful lasers are fired at microscopic droplets of molten tin, turning them into plasma hotter than the surface of the sun. That creates a pulse of extreme ultraviolet light, which is then reflected of a series of mirrors, each made with atomic-level precision and taking months to make, before the pattern is finally transferred to the silicon wafer.
The hardest part to replicate is the optics. EUV-grade mirrors are produced by a single supplier, Carl Zeiss SMT. They are the product of decades of tightly knit integrated development between Zeiss and ASML.”

Other than the fact that ASML has a large stake in Zeiss and won’t let Zeiss sell these mirrors to any other rival, and even more powerful barrier to entry is customers’ reluctance to switch. ASML’s customers are the world’s largest chip foundries. These foundries run 24×7 and cannot afford to lose a single day of output (because the opportunity cost of doing so would run into hundreds of millions of $s). A lithography machine which works almost as well as ASML’s, but which is half the price is simply not worth the risk. In other wise, saving some money on the sticker price of ASML’s EUV machines is not worthwhile for the customer. Unsurprisingly therefore, ASML controls over 90% of the entire lithography tool market, which is essential for producing chips in smartphones, AI systems, and vehicles.

If you want to know about this remarkable firm, click here for our podcast on ASML.

Investment implications for you

If you day job preoccupies you and does not give you enough time to research uniquely moated assets like ASML, you could consider joining us in our Global Compounders Portfolio.

Source: Marcellus Investment Managers

Thanks to the reforms expedited by the Indian authorities over the past couple of years (see our 7^th January ‘26 blog: https://marcellus.in/blogs/four-mega-reforms-which-opened-up-global-investing-for-indians/ ), we are now able to diversify globally in a cost-efficient and tax-efficient manner. Our track record in compounding across the world is shown below. Since inception in Oct 2022, we have compounded at 27% CAGR (net of all fees & expenses in INR).

If you would like to join us in Global Compounding, please let me know.

Global Compounders’ Performance as of 31 Dec’25 (Figures in INR and in percentage)

Source: Marcellus performance data is shown gross of taxes and net of fees & expenses charged till end of last month on client account. Performance fees are charged annually in December. Returns more than 1-year are annualized. Marcellus’ GCP USD returns are converted into INR using USD: INR exchange rate from RBI – Link for the reference

Note: * Since Inception performance calculated from 31^st Oct 2022. The inception date is 31^st Oct 2022, being the next business day after the account got funded on 28^th October 2022. S&P 500 net total return is calculated by considering both capital appreciation and dividend payouts. The calculation or presentation of performance results in this publication has NOT been approved or reviewed by the IFSCA or US SEC. Performance is the combined performance of RI and NRI strategies.

Marcellus GCP PMS is offered by Marcellus Investment Managers GIFT Branch in a segregated managed accounts format. The AIF is managed by Marcellus International Investment Managers LLC which is sub-advised by Marcellus GIFT Branch. The performance is provided for reference and does not include expenses typical to AIF structure.

Thanks,
Saurabh Mukherjea

ASML forms a part of Marcellus’ portfolios. Hence, Marcellus, its employees and affiliates may have interest and stake in the mentioned stocks. The material shared is only for educational purposes.