The US says ASML’s top chip tool may be in China. ASML says it isn’t

The United States has raised concerns that one of the world's most advanced semiconductor manufacturing tools—produced by Dutch company ASML—may have found its way into China, potentially violating strict export control measures. According to reports from Bloomberg, U.S. Commerce Secretary Howard Lutnick has reportedly expressed these concerns during recent discussions with high-level executives at ASML. The concern centers around the possibility that an extreme ultraviolet (EUV) lithography machine, which is essential for producing the most sophisticated microchips, could now be located in China. This would represent a significant breach of existing restrictions that have prevented ASML from exporting EUV systems to China since the early days of the Trump administration.

ASML, based in the Netherlands, holds a unique position in the global semiconductor industry. It is responsible for developing and manufacturing the only machines capable of EUV lithography—a critical process used to print the intricate circuit patterns necessary for the latest generation of semiconductors. These machines are vital for companies like TSMC, the leading foundry behind chips used in products ranging from smartphones to artificial intelligence hardware. The significance of ASML's role is underscored by its status as Europe's most valuable publicly traded company, with a market capitalization nearing $700 billion as of recent estimates.

The implications of an EUV machine being in China are profound. Such a device would allow Chinese manufacturers to produce highly advanced chips, potentially enhancing their capabilities in both civilian and military applications. Given the strategic importance of controlling access to such technology, the U.S. has implemented stringent export controls aimed at preventing the proliferation of advanced AI technologies to countries perceived as potential adversaries.

ASML's CEO, Christophe Fouquet, addressed these concerns in a conversation held months before the issue became public. He emphasized that the company maintains detailed records of every machine it has ever produced. These machines are either currently in use under monitored conditions or have been decommissioned and returned to ASML. Fouquet highlighted the company's internal security measures, including a digital firewall that separates employees with access to EUV technology from those without such access. Additionally, he noted that ASML's operations in China are deliberately structured to ensure that its Chinese workforce does not have access to sensitive information related to EUV technology.

Fouquet also pointed out the practical considerations that make it unlikely for ASML to engage in unauthorized exports. While the company does sell older models of deep ultraviolet lithography tools to China, these transactions are carefully managed to maintain a technological edge. By allowing the sale of outdated equipment, ASML ensures continued business relations while avoiding the risk of enabling a direct competitor. The company anticipates that approximately 20% of its 2026 revenue will come from permitted sales to China, underscoring the economic stakes involved in maintaining compliance with export regulations.

Despite these assurances from ASML, the U.S. government continues to investigate the matter thoroughly. Officials have indicated that they possess evidence suggesting that certain components and transportation equipment associated with EUV systems have been sent to China. However, they have not disclosed specific details or presented this evidence to either the media or ASML itself. The absence of concrete proof leaves room for speculation and debate regarding the validity of the claims. As the investigation unfolds, the outcome could significantly impact international trade dynamics and the ongoing efforts to regulate the flow of advanced technology.