2  Case Study: Optimizing ASML’s Global Supply Chain Operations

ASML, a global leader in photolithography1 machines for the semiconductor industry, produces Extreme Ultraviolet (EUV2) and Deep Ultraviolet (DUV3) systems critical to semiconductor manufacturing. Semicoductor fabrication plants (fabs4) use these machines to create intricate patterns on silicon wafers5, enabling the production of advanced microchips—the mainstay of the modern digital economy, powering everything from smartphones to supercomputers.

ASML employs a centralized inventory management system to oversee spare parts, integrating real-time data on stock levels, demand forecasts, and supply chain performance to enable proactive decision-making across its network. The company works with nearly 5,000 suppliers and operates over 60 service warehouses across 16 countries to support its worldwide customer base (ASML Holding NV 2024).

Machines are manufactured in cleanrooms—highly controlled environments to prevent contamination—in an assembly-to-order6 fashion, with each machine requiring approximately 80,000 components. First, these components are combined into modules such as the optical system, wafer stage, light source, and control unit, which are then assembled into machines and later disassembled to ship to customers. Shipments are carried out by air, sea, and land transport, depending on the urgency and distance.

Installing a machine at a customer site is a complex process, often taking 6-12 months and involving multiple shipments of components and modules. Once installed, ASML provides ongoing support, including spare parts management, to ensure high service levels and machine uptime. Customers establish service level agreements (SLAs) with ASML, specifying uptime requirements and response times for machine repairs. Machine downtime (i.e., when a machine is not operational) can be costly, so ASML aims to minimize downtime by ensuring spare parts (i.e., components needed for repairs) are quickly available. To this aim, the company keeps a network of warehouses around its main customer fabs stocked with critical spare parts. These warehouses work in tandem with ASML’s global supply chain to ensure that parts are available when needed, balancing costs and availability.

sequenceDiagram
  %% Participants
  participant S as Suppliers
  participant F as Factories
  participant C as Central<br>Warehouses
  participant L as Local<br>Wharehouses
  participant Cus as Customer<br>Fabs

  %% FORWARD FLOWS
  S->>F: Components
  F->>C: Machines and<br>Spare Parts
  C->>L: Spare Parts
  C->>Cus: Machines
  L->>Cus: Spare Parts

  %% LATERAL TRANSHIPMENTS
  L->>L: Stock Balancing
Figure 2.1: Overview of ASML’s global supply chain network (forward flow). Central warehouses stock critical spare parts, which are shipped to local warehouses near customer fabs. Local warehouses manage inventory and ship parts to customers as needed. The network is designed to minimize downtime and ensure high service levels.

2.1 The Task: Improving ASML’s Supply Chain Operations

Your group will take on the role of an ASML analyst team tasked with optimizing part of its supply chain operations. Your goal is to analyze the provided data, identify areas for improvement, and propose actionable recommendations to enhance ASML’s supply chain efficiency and effectiveness. There is no single correct answer, but your recommendations should be based on sound analysis and data-driven insights.

2.2 References

ASML, dir. 2025. Computational Lithography: Driving Nanometer Precision in Microchip Manufacturing. https://www.youtube.com/watch?v=9RZreu5z_Gc.
ASML Holding NV. 2024. “ASML Annual Report 2024.” Annual report. Veldhoven, Netherlands: ASML Holding NV. https://www.asml.com/en/investors/annual-report/2024.

  1. Photolithography: A process used in semiconductor manufacturing to transfer patterns onto silicon wafers using light.↩︎

  2. EUV: Extreme Ultraviolet lithography, a technology using extreme ultraviolet light to create intricate patterns on semiconductor wafers.↩︎

  3. DUV: Deep Ultraviolet lithography, an older technology using deep ultraviolet light for semiconductor manufacturing.↩︎

  4. Fabs: Semiconductor fabrication plants, facilities where integrated circuits are manufactured.↩︎

  5. Silicon wafers: Thin slices of silicon used as the substrate for microchips, where patterns are etched to create integrated circuits (see ASML 2025).↩︎

  6. Assembly-to-order (ATO): A production strategy where components are assembled into final products only after an order is received, allowing for customization and flexibility.↩︎