Source | Benyuan Finance

Author | Yu Shuya

It may come as a surprise that Zeiss, widely hailed as the “King of Optics,” is not a publicly listed company.

In an era where capital is fervently pushing tech firms toward initial public offerings (IPOs), why does Zeiss—a company that holds the core technologies of chip optics and has even secured billions of euros in investment from ASML—choose to remain unlisted?

The answer can be traced back to a rule established over a century ago.

In 1896, Ernst Abbe formulated the “Statutes of the Carl Zeiss Foundation,” establishing an almost unshakeable principle: All shares of Zeiss are owned by the foundation, with no selling, transferring, or dividing, and the company will never enter the capital markets.

It is precisely this “anti-traditional,” anti-capital structure—seemingly unconventional by Wall Street standards—that has enabled Zeiss to weather two world wars, the division of East and West Germany, fierce competition from Japanese camera manufacturers, and multiple downturns in the semiconductor industry, ultimately reaching the pinnacle of human manufacturing.

Looking back at Zeiss’s century-long history, let’s delve into one of its most crucial battles. Zeiss established a subsidiary called Zeiss SMT, which focuses exclusively on manufacturing optical systems for ASML’s EUV lithography machines.

The challenge with EUV technology lies in its use of 13.5-nanometer extreme ultraviolet light, which is absorbed by almost all known materials. As a result, Zeiss can only use mirrors to guide the light path. An EUV machine contains over a dozen such mirrors, each composed of dozens of thin film layers, with surface errors minimized to the 0.1-nanometer level—smaller than half the diameter of a single silicon atom.

Zeiss has pushed the boundaries of human industrial precision to the atomic scale.

In 2016, ASML invested €1.76 billion to acquire a 24.9% stake in Zeiss SMT, securing an absolute monopoly in the EUV era. An EUV lithography machine, priced at over €150 million, has become a strategic asset shaping the global semiconductor industry landscape.

And the most advanced chip in your phone? The first light it ever encountered was reflected off an atomic-scale mirror polished by Zeiss.

But what few people realize is that it took nearly 30 years for EUV technology to transition from concept to mass production. Along the way, Zeiss invested billions of euros, with two generations of engineers aging prematurely, and for over a decade, the company barely turned a profit.

No chief financial officer (CFO) of a publicly listed company would dare approve such a risky and long-term venture. So how did Zeiss manage it?

Because 130 years ago, Zeiss had already assembled the industry’s “Golden Triangle”: Carl Zeiss standardized manufacturing processes, Ernst Abbe transformed optics from empirical knowledge into modern physics, and Otto Schott pioneered glass formulations from scratch, securing core optical materials.

Theory, materials, and manufacturing—all under one roof. That is Zeiss’s true strength.

But that’s not the whole story of Zeiss; the company also teetered on the brink of bankruptcy.

In the 1990s, Nikon and Canon entered the camera market with electronic shutters at one-tenth the cost of Zeiss’s mechanical shutters. Meanwhile, Zeiss persisted with mechanical shutters, insisting on old craftsmen hand-polishing lenses in a process they called “Golden Finger.”

The result was predictable: low production volume, high costs, and unstable quality control. Japanese cameras dominated the market for three decades, pushing Zeiss to the margins.

In 1994, Zeiss conducted massive layoffs, with the century-old empire hanging by a thread. Who saved it in the end? Its then-overlooked semiconductor business. Relying solely on orders for lithography machine lenses, Zeiss barely survived.

That near-death experience taught Zeiss a simple truth: Even extreme technological idealism needs the foundation of commercial reality.

Zeiss adopted a dual-wheel drive strategy, balancing technological R&D with consumer markets, perfectly complemented by its unique foundation governance structure. This approach preserved its long-term technological DNA while granting the flexibility to adapt to market changes, ultimately securing its dominance in the global precision optics field.

*All rights reserved. Unauthorized reproduction is prohibited. Data supported by Tianyancha.

end