By Leo Sun, The Motley Fool
Publication Date: 2026-10-16 19:15:00
Nvidia (NASDAQ: NVDA) and TSMC (NYSE: TSM) are often considered the bellwethers of the AI chip market. Nvidia, the world’s largest producer of discrete GPUs for data centers, provides the best “picks and shovels” for the AI gold rush. TSMC, the world’s largest and most advanced contract chipmaker, manufactures Nvidia’s chips. It also serves other fabless AI chipmakers, including AMD (NASDAQ: AMD) and Broadcom (NASDAQ: AVGO).
Therefore, if Nvidia stopped developing new AI chips and TSMC stopped manufacturing them, the AI market would grind to a halt. However, neither company could produce new chips without ASML (NASDAQ: ASML) — the real bottleneck in the AI supply chain.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Why is ASML the “real” bottleneck in the AI chip market?
ASML, which is based in the Netherlands, is the world’s largest producer of lithography systems. These systems enable chip foundries, like TSMC, to optically etch circuit patterns onto silicon wafers. It dominates the market for lower-end deep-ultraviolet (DUV) lithography systems, which are used to produce older, larger chips. It’s also the only producer of high-end extreme ultraviolet (EUV)…
