ASML Holding NV (NASDAQ:ASML), the world’s leading supplier of advanced chipmaking equipment, is seeking a foothold in India as Prime Minister Narendra Modi pushes to establish a domestic semiconductor industry.
The Dutch company manufactures extreme ultraviolet (EUV) lithography machines, essential for producing the most advanced semiconductors, including Nvidia’s (NASDAQ:NVDA) high-performance AI chips.
Foundries such as Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) rely on ASML’s systems to etch microscopic circuitry onto silicon wafers, enabling the designs that underpin global computing power.
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ASML and Nvidia already share a close partnership. Nvidia integrates its GPUs into ASML’s computational lithography software, which accelerates chip design and improves manufacturing efficiency.
That collaboration highlights the strategic importance of ASML’s technology not only to AI but also to defense, data centers, and consumer electronics.
India’s semiconductor ambitions are growing rapidly. The country’s chip market, currently worth about $55 billion, is projected to double by 2030.
At the Semicon India summit in New Delhi, ASML Chief Executive Christophe Fouquet signaled interest in expanding ties with local chipmakers, according to Bloomberg.
ASML confirmed its business in India is currently very small, but it expects to increase its engagement with local companies next year.
The timing is pivotal. Modi has pledged that India’s first locally manufactured chips will reach the market by the end of 2024.
That milestone could open opportunities for ASML, particularly as sales to China face mounting headwinds from U.S. export restrictions.
Geopolitical tensions have already constrained demand in China, the company’s second-largest market, leaving investors wary of slower growth despite robust earnings.
To attract global players, India has set aside 760 billion rupees ($8.6 billion) in incentives, fueling large-scale projects by the Tata Group and Micron Technology (NASDAQ:MU).
If successful, the effort could ease global supply chain risks while positioning India as a strategic hub for advanced chip production, a shift that may benefit ASML as a key supplier.
Still, investors remain cautious. ASML shares are up 7% year-to-date, underperforming the Nasdaq 100 Index’s 12% gain.
U.S. export restrictions on China have pressured sales and raised concerns about the company’s ability to sustain its recent momentum.
Despite reporting strong earnings, ASML’s cautious outlook for 2026 has added to uncertainty about growth prospects beyond next year.
Price Action: ASML stock is trading higher by 1.65% to $748.95 at last check Thursday.
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