Nikon seeks to break Dutch ASML’s grip on semiconductor market

Japanese optics and imaging giant Nikon Corporation is positioning itself for a comeback in the semiconductor equipment market, hoping to win customers from industry leader ASML Holding by offering more competitively priced lithography systems.

The strategy was outlined as Nikon unveiled its medium-term management plan through fiscal 2031 this month. Speaking to Nikkei Asia, the company's newly appointed president and chief executive, Yasuhiro Ohmura, said the company's vertically integrated manufacturing model gives it a significant cost advantage.

"We manufacture many parts in-house, giving us an advantage in cost competition," said Ohmura, who assumed the role in April.

The company has identified its semiconductor equipment division as a key driver of future growth. The business is particularly important for Ohmura, who built much of his career within Nikon's chipmaking equipment operations.

Nikon remains one of only two companies in the world, alongside ASML, that supply argon fluoride (ArF) lithography systems, a crucial technology used in semiconductor manufacturing.

According to Ohmura, discussions with several major chipmakers in the United States and Asia are progressing well, with potential new orders for Nikon's flagship ArF systems approaching the final stages.

"We can compete on price," Ohmura said. "Even with low prices, there is still considerable profit."

Historically, Nikon maintained a close relationship with Intel, which at one point accounted for roughly 80 percent of the company's ArF lithography equipment orders. However, Nikon's semiconductor equipment sales slowed in recent years as Intel struggled to maintain its position in the global chip industry.

"We lacked a sufficient track record [aside from Intel] and our support capabilities hadn't earned trust," Ohmura said.

The renewed push comes as demand for semiconductor manufacturing equipment surges amid the global artificial intelligence boom. Rapid growth in AI applications has fueled massive investment in advanced chips, driving demand throughout the semiconductor supply chain.

Ohmura believes many customers are increasingly interested in diversifying their supplier base rather than relying exclusively on ASML, particularly as chipmakers seek greater pricing leverage and supply-chain resilience.

In previous decades, Nikon and ASML competed more directly on technological innovation. Over time, however, ASML strengthened its position through long-term partnerships with suppliers and customers, ultimately securing dominance through its exclusive leadership in the most advanced lithography technologies.

Despite Nikon's ambitions, significant challenges remain. According to Nikkei Asia, the company's share of the global ArF lithography market has continued to decline, raising questions about whether its pricing strategy alone will be enough to win back customers and regain lost market share.

Still, with AI-driven semiconductor demand showing little sign of slowing, Nikon sees an opportunity to reestablish itself as a meaningful competitor in one of the technology industry's most strategically important markets.

By Nazrin Sadigova