Zeiss Semiconductor Manufacturing Technology (Zeiss SMT) is significantly expanding its manufacturing facilities in Oberkochen, a move that underscores its critical role in the global semiconductor industry. The company plans to construct approximately 25,000 square meters of new production and auxiliary spaces dedicated to creating optical systems for ASML's lithography machines, which are essential for the production of cutting-edge microchips.
Some sections of the new facility have already begun operations, with initial staff starting work in one of the buildings, while the remaining structures will be rolled out in phases. This expansion is strategically important not only for Zeiss but also for the entire semiconductor sector, as the company's facilities in Oberkochen and Weizlar are the only ones globally producing optical columns for ASML's EUV lithography systems.
ASML itself has acknowledged this bottleneck in its annual report, indicating that the output of lithography machines is currently constrained by Zeiss SMT's production capabilities. The German firm is the sole supplier of crucial optical components—such as lenses, ultra-precise mirrors, illumination systems, and collectors—making it indispensable to the manufacturing of ASML's machines. A prolonged disruption in their supplies would essentially halt ASML's production.
Demand for this advanced equipment is soaring. ASML has announced plans to boost production of its Low-NA EUV scanners by roughly 30% by 2027, increasing from approximately 65 units annually. Similar plans are being considered for 2028, alongside efforts to streamline production processes, including reducing the assembly time for a lithography complex from 22 weeks to around 15-16 weeks.
The expansion of Zeiss is particularly crucial as the company begins mass production of the next-generation High-NA EUV systems, whose optical modules are among the most complex engineering products worldwide. Each optical column contains over 40,000 parts and weighs about 12 tons, with the illumination system adding another 25,000 components and approximately 6 tons.
Manufacturing individual mirrors can take several months, and post-production, they undergo testing in massive vacuum chambers weighing over 150 tons, where experts measure surface deviations with nanometer precision. To accelerate this production ramp-up, ASML is actively financing its key partner. As of the end of 2025, the total amount of credit extended to Zeiss SMT reached €1.91 billion, with an additional €1.19 billion provided as advances for future optical system deliveries. Furthermore, the two companies have entered additional long-term financing agreements to support ongoing production expansion.
These investments are already yielding positive results for Zeiss SMT, with a 23% increase in revenue to €5.055 billion reported for the fiscal year ending September 2025, making it the largest business segment within the Zeiss group. In addition to the Oberkochen expansion, Zeiss is building another facility in Weizlar, expanding cleanroom space in Rossdorf, and has opened an innovation center in South Korea.
This expansion not only solidifies Zeiss's leadership in high-precision optical manufacturing but also positions the company to meet the growing demands of the semiconductor market, potentially impacting competitors who rely on similar technologies.
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