ASML, semiconductor power, and India’s real technological test
Inside a highly controlled cleanroom in the Netherlands stands one of the most complex machines ever built. It costs up to 200 million dollars. It weighs more than a commercial aircraft engine. It takes years to assemble and months to install. This is the extreme ultraviolet lithography system built by the Dutch company ASML.
Without it, the most advanced semiconductor chips in the world cannot be manufactured.
Every cutting-edge processor that powers artificial intelligence systems, advanced defence platforms, high-performance computing clusters, premium smartphones and next-generation data centres depends on this technology. Whether the chip is fabricated by Taiwan’s TSMC, America’s Intel or South Korea’s Samsung Electronics, it requires EUV lithography to reach the smallest nodes.
Recently, reports that ASML plans to reduce around 1,700 jobs, roughly four percent of its workforce, triggered commentary across technology and policy circles. Some interpreted the move as a signal of weakness in the semiconductor cycle. Others saw an opportunity for countries seeking to build domestic capability to attract high-end talent.
Both readings miss the larger point.
The real story is not the number of layoffs. It is the structure of power in the semiconductor ecosystem and what that structure means for countries such as India that are attempting to enter the arena.
The choke point in the digital age
In earlier decades, oil refineries and shipping lanes shaped geopolitics. In the digital era, lithography systems increasingly define technological leverage.
Semiconductor manufacturing works by etching patterns onto silicon wafers using light. The smaller the wavelength of light, the finer the circuit patterns and the more transistors that can be packed into a chip. EUV lithography uses light at a wavelength of 13.5 nanometres, enabling production at the most advanced nodes.
ASML is the only company in the world that can supply EUV systems at commercial scale.
This position is not merely a case of strong market share. It is a structural choke point.
Bringing EUV to market required decades of research, billions in investment and coordination across a deeply specialised global supply chain. The mirrors that guide the light are produced by Zeiss in Germany. The light source technology involves American expertise. Precision engineering, vacuum systems, materials science and software integration converge in ways that are difficult to replicate.
No country can recreate this ecosystem quickly, even with large financial commitments.
In that sense, ASML is not just a company. It is an institution embedded at the centre of the global technology order.
Geopolitics inside the cleanroom
Semiconductors have moved from being cyclical industrial products to strategic assets. The United States has imposed export controls restricting the sale of advanced chipmaking equipment to China. The Netherlands has aligned aspects of its export policy with American security concerns. China, in turn, has accelerated efforts to localise semiconductor capabilities.
ASML sits at the heart of this contest.
The absence of EUV access constrains China’s ability to scale leading-edge manufacturing. Chinese firms have demonstrated ingenuity in working around restrictions, but structural limits remain.
This dynamic reveals a deeper truth. The most powerful lever in the semiconductor value chain is not chip design or even fabrication capacity. It is equipment manufacturing.
Design houses can be created within years. Fabrication plants can be built with sufficient capital and policy support. But the tools that enable advanced fabrication require generational commitment and accumulated know-how.
For countries aspiring to technological sovereignty, this is an uncomfortable reality.
Understanding the layoffs
ASML’s decision to reduce around 1,700 roles should be interpreted in context. Reports indicate that the reductions are concentrated in management and support functions rather than core EUV engineering teams. The company has described the move as part of organisational streamlining.
The semiconductor sector is recalibrating after the pandemic boom. Demand in certain segments cooled even as artificial intelligence applications drove new orders. Companies across the supply chain are adjusting cost structures.
At the same time, ASML’s order book remains strong, particularly for EUV and the next-generation High-NA EUV systems that promise even greater precision.
In technology monopolies, restructuring often reflects preparation for the next innovation cycle rather than retreat. Simplifying management layers can accelerate development. Cost discipline can redirect resources towards research.
The idea that a wave of irreplaceable EUV expertise has suddenly become available to the world is likely overstated. Core technological capabilities are typically insulated from such reductions.
Yet the development does raise a question for countries like India. If strategic talent does become mobile, does India possess the ecosystem to absorb and leverage it?
India’s semiconductor ambition
India has launched a substantial semiconductor mission backed by financial incentives. The goal is to attract fabrication plants, support design capabilities and reduce import dependence. Several global players have engaged with Indian states to establish manufacturing units.
This marks a significant shift from the past, when India largely remained a design and services hub without fabrication infrastructure.
However, fabrication is only one layer of the value chain.
A fab can be set up with capital, regulatory facilitation and global partnerships. But the underlying intellectual property and process knowledge often remain with multinational headquarters. Equipment, calibration expertise and advanced process recipes continue to flow from established ecosystems.
If India’s semiconductor strategy focuses solely on fabs, it risks reproducing dependency at a different level.
The deeper question is whether India intends to participate in equipment manufacturing and upstream technological development.
Making chips versus making the machine
The distinction between manufacturing chips and manufacturing the tools to manufacture chips is critical.
Equipment manufacturing demands cross-disciplinary excellence in optics, plasma physics, ultra-precision mechanics, materials science, software engineering and metrology. It requires research cultures that tolerate failure and timelines that extend beyond political cycles.
Taiwan’s TSMC emerged from a sustained industrial policy framework and disciplined execution. South Korea’s Samsung Electronics grew under long-term state backing and corporate risk appetite. Japan’s earlier semiconductor leadership was built on post-war industrial policy and process innovation.
In each case, continuity and patience were central.
India’s industrial ecosystem has strengths in information technology, pharmaceuticals and large-scale infrastructure. But deep-tech equipment manufacturing remains underdeveloped. Research universities often operate in silos. Private capital tends to favour sectors with quicker returns.
Lithography and advanced semiconductor tools do not promise immediate profitability. They demand patience measured in decades.
The twenty-year commitment
If India seeks meaningful strategic autonomy in semiconductors, it must adopt a long horizon.
This could include establishing national research centres dedicated to semiconductor equipment, with stable multi-decade funding. It could involve encouraging large industrial houses to create autonomous research arms focused on frontier technologies. Universities would need to be integrated into long-term collaborative projects aligned with industrial objectives.
The aim would not be to replicate EUV overnight. That would be unrealistic. Instead, India could build capability in adjacent domains such as metrology systems, deposition tools, materials innovation and advanced packaging.
Incremental competence accumulation is more credible than dramatic catch-up.
Such a strategy would require insulation from short-term political and market pressures. It would also demand regulatory clarity and strong intellectual property enforcement to attract global collaborators.
Talent as strategic infrastructure
High-technology ecosystems are built not only on capital but on tacit knowledge. The behaviour of complex systems under stress, the intuition developed through repeated prototyping and failure, and the subtle calibration of precision instruments are not fully captured in patents.
Countries that attract and retain such expertise gain invisible advantages.
The United States built Silicon Valley through a combination of research universities, defence funding and immigration openness. Talent clustered around institutions that offered freedom to experiment.
For India, becoming a magnet for semiconductor equipment talent would require more than competitive salaries. It would require credible laboratories, predictable policy frameworks, export clarity, and social infrastructure that supports global professionals and their families.
Talent migrates towards ecosystems that offer both professional challenge and institutional trust.
The role of Indian capital
India’s large conglomerates have demonstrated capacity in executing projects of scale across sectors such as energy, telecommunications, logistics and retail. These achievements are significant.
However, frontier semiconductor equipment development is a different category of endeavour. It is driven by scientific depth rather than operational expansion.
If Indian capital is to play a transformative role, it must accept long gestation periods and uncertain commercial outcomes. This may require establishing independent research entities insulated from quarterly financial pressures. It may require global scientific leadership and partnerships with academic institutions.
Such a pivot would represent a structural shift in corporate strategy.
The payoff, however, could be substantial. Ownership of critical equipment capabilities would enhance India’s bargaining power in global supply chains and reduce vulnerability to external controls.
Beyond slogans
Self-reliance in semiconductors is an appealing political objective. Yet absolute autonomy is unrealistic in a globalised industry where even the most advanced companies depend on cross-border inputs.
The pragmatic objective should be credible participation rather than isolation.
India can identify segments within the semiconductor equipment and materials ecosystem where it can build leadership over time. Advanced packaging, power electronics tools, specialised materials or metrology systems may offer entry points.
Such participation would complement fab investments and gradually deepen technological sovereignty.
A structural choice
ASML’s workforce reduction is not a collapse of monopoly power. It is not a simple opportunity for talent acquisition. It is a reminder of where leverage resides in the modern technology stack.
The machine that makes the machine defines the hierarchy of power.
India’s semiconductor mission will ultimately be evaluated not by ribbon cuttings but by whether it builds enduring capability. Can India sustain a twenty-year commitment to deep-tech development? Can it align policy, academia, capital and industry around a shared technological horizon? Can it move from being primarily a consumer and assembler of advanced technologies to being a creator of enabling tools?
These questions extend beyond semiconductors. They define the structure of India’s economic rise.
The cleanroom in the Netherlands offers a quiet lesson. Precision, patience and institutional continuity shape technological power. Nations that invest in these attributes determine the contours of the future.
India now faces a choice. It can remain at the user end of the global technology chain, or it can begin the slower, more demanding journey towards shaping the chain itself.
