US Claims ASML’s Key Chip Tool is in China; ASML Denies It
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U.S. Concerns About ASML’s EUV Machines in China
According to a report by Bloomberg, U.S. Commerce Secretary Howard Lutnick recently expressed concerns to senior executives at ASML, a Dutch chipmaker, regarding the potential presence of one of their extreme ultraviolet (EUV) lithography machines in China. These machines are unique in their ability to print the most advanced semiconductor patterns, and their export to China has been restricted since the Trump administration.
Serious Claims and Evidence
Lutnick’s claims are backed by assertions from senior government officials who indicate they possess evidence showing that ASML may have shipped EUV-related components and transport equipment to China. However, they have refrained from disclosing this evidence either to Bloomberg or ASML. The company firmly denies any existence of an EUV machine in China, and the Commerce Department has not confirmed whether it has proof of an actual system on Chinese territory.
Why This Matters Beyond the Chip Industry
The implications of this situation extend far beyond the realm of semiconductor manufacturing. Despite being relatively unknown to the general public, ASML plays a crucial role in the global AI ecosystem. It manufactures the only machines on Earth capable of EUV lithography, essential for creating the intricate circuit patterns in cutting-edge chips.
All advanced processors designed by TSMC, which produces chips for major companies like Nvidia and Apple, rely on ASML’s technology. Developing these tools took ASML nearly two decades and involved significant investment. Currently, ASML stands alone as the sole supplier of EUV lithography machines, which has increased its market cap to around $700 billion, making it Europe’s most valuable public company amidst soaring demand for AI-driven chips.
The Stakes of EUV Technology in China
If a single EUV machine were to find its way to China, it would represent a serious breach of the U.S. export control measures aimed at preventing the transfer of advanced AI capabilities to Beijing’s military and industry.
ASML’s Stance on the China Question
In a conversation with ASML CEO Christophe Fouquet six weeks prior to the allegations surfacing, he emphasized that the company closely monitors every machine it has delivered. They are either actively used by monitored clients or have been dismantled and returned. Fouquet elaborated on ASML’s internal protocols: employees with access to EUV technology and documentation are separated from those who do not have such access, with the company’s personnel in China deliberately positioned on the restricted side.
Fouquet also pointed out that the ability to develop an EUV machine stemmed from existing knowledge, with 80% of the technology already in place. The major breakthrough—generating EUV light—was a challenge that took two decades. He maintained that reverse-engineering such technology is impossible for those who have never had access to it, indicating that China has not possessed EUV machinery.
The Commercial Perspective
From a commercial standpoint, the notion that ASML would jeopardize its export license by quietly supplying a Chinese client seems unlikely. While ASML does offer older-generation deep ultraviolet (DUV) tools to China, Fouquet clarified that this was a strategic decision meant to maintain a generational gap, allowing business while avoiding the production of future competitors. ASML anticipates approximately 20% of its revenue in 2026 to derive from already approved sales to China; jeopardizing the EUV ban for an illicit transaction would pose a significant risk to its revenue and status in the industry.
The Need for Caution Regarding Allegations
While the allegations raised are serious, they should not be taken at face value without further evidence. The government has yet to disclose its findings, warranting a cautious approach to conclusions until more information is available.
The Role of xLight and Startup Landscape
Under Lutnick’s administration, the Commerce Department approved an investment of up to $150 million in xLight, a startup working on next-generation light-source technology that could potentially challenge ASML’s EUV monopoly. Interestingly, xLight’s CEO has indicated a vision of partnership with ASML, focusing on supplementary technology rather than direct competition. When posed with this information, Fouquet expressed skepticism, asserting ASML does not rely on xLight’s advancements to maintain its leadership.
Connections Worth Investigating
The circumstances of Lutnick’s scrutiny over ASML may be coincidental, but they merit examination. The entanglement of a government official assessing a monopoly while supporting a startup aiming to innovate in that very space raises intriguing questions.
The Competitive Landscape
xLight isn’t the only startup aiming to disrupt the lithography market. Ventures like Substrate, backed by Peter Thiel—a figure associated with Trump’s political sphere—are also pursuing technologies to rival EUV, indicating a shift that could potentially affect ASML’s dominant position.
Legislative Developments
Recent bipartisan efforts in Congress could significantly impact ASML’s operations. A proposed bill aims to impose restrictions beyond EUV technology, effectively banning all DUV shipments to China, which represent about 20% of ASML’s anticipated revenue in 2026. This legislation is progressing through committees and may influence future market dynamics.
Conclusion
In summary, the allegations against ASML related to the potential transfer of EUV technology to China represent a critical issue not just for the company, but for the broader semiconductor industry and geopolitical landscape. As the government evaluates its claims, and as ASML navigates its monopolistic position in the market, the outcomes of these discussions could have far-reaching implications for technological advancement and global trade relations.
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