The US says ASML's top chip tool may be in China, but how?

A significant development in the high-stakes world of semiconductor manufacturing and global AI competition has emerged, with the United States government raising concerns that one of ASML's highly restricted, top-tier chipmaking tools may have found its way to China. This allegation, reported by Bloomberg, has sparked a firm denial from ASML, the Dutch company holding a near-monopoly on the technology critical for producing the most advanced chips powering today's artificial intelligence.

The situation underscores the intense geopolitical struggle for technological supremacy, particularly in the realm of advanced semiconductors, which are the backbone of modern AI systems. The US has been actively implementing and tightening export controls to limit China's access to these crucial technologies, aiming to curb its progress in areas like AI and supercomputing.

The Core of the Dispute: ASML's EUV Technology

At the heart of this controversy are ASML's Extreme Ultraviolet (EUV) lithography machines. These are not just any machines; they are enormous, complex systems, roughly the size of a school bus and weighing around 180 tons. They are the only tools in the world capable of etching the microscopic patterns required for manufacturing the most advanced semiconductors – the very chips that power cutting-edge AI applications, from large language models to complex data center operations.

Due to their strategic importance, EUV systems have been subject to strict export restrictions to China since the first Trump administration, around 2019. The Netherlands, where ASML is based, has also imposed further controls on ASML's advanced Deep Ultraviolet (DUV) machines, following agreements with the US and Japan.

US Allegations and ASML's Firm Denial

US Commerce Secretary Howard Lutnick reportedly conveyed Washington's concerns to ASML's senior leadership in a series of recent meetings. He outlined a belief that an EUV machine, or components specifically designed for one, may have reached China, thereby violating US-led export restrictions.

However, ASML has unequivocally pushed back against these claims. The company issued a strong denial, stating it has "never shipped an EUV machine to China nor have we shipped to China any component, module or equipment specially designed to be used in an EUV machine." ASML emphasizes that its EUV machines are manufactured in limited quantities, require constant, specialized upkeep from ASML employees, and "phone home" with continuous communication, making it extremely difficult for one to be moved or operated unnoticed.

Senior US officials, speaking anonymously, reportedly claim to possess evidence suggesting ASML may not have acted in good faith, citing exports to China of equipment related to EUV tools. However, these officials have declined multiple requests to publicly disclose this evidence, citing the sensitivity of their intelligence sources.

The Commercial Logic and the Stakes for ASML

The feed item highlighted a "commercial logic that cuts against the idea that ASML would risk its export license to arm a Chinese customer." This logic is sound. ASML's export license is fundamental to its business model, especially given its monopoly on EUV technology. Torching that license to supply one Chinese customer would be a severe blow, potentially leading to corporate ruin.

China has been a significant market for ASML, particularly for its DUV systems. In 2024, China accounted for about 41% of ASML's revenue, dropping to roughly 33% in 2025, and is projected to fall to around 20% in 2026 due to tightening export controls. Despite this reduction, China remains a substantial customer, and ASML needs to balance its commercial interests with strict compliance with international regulations.

ASML maintains that it regularly engages in transparent dialogues with governments worldwide and is fully committed to complying with all applicable export control regulations.

How Could an EUV Tool Potentially Reach China?

Given ASML's strong denials and the inherent complexities of its EUV systems, the question of "how" such a machine could end up in China becomes highly perplexing. ASML states that customers cannot remove, transport, or relocate EUV systems without its direct involvement due to specialized handling requirements.

Possible, albeit speculative, avenues could include:

• Components vs. Complete Systems: The US allegations sometimes mention "EUV-related components and transport equipment" rather than a complete EUV machine. While ASML denies shipping any specialized components for EUV to China, the distinction between a full system and critical parts could be a point of contention.
• Older or Refurbished Systems: While EUV systems have been restricted since 2019, theoretically, older or refurbished DUV systems (which are less advanced but still crucial for chipmaking) might have been legally acquired before restrictions tightened further, or through less scrutinized channels. However, the current concern specifically targets EUV.
• Reverse Engineering or Domestic Development: China has reportedly been pursuing its own domestic EUV program, allegedly with the help of former ASML engineers. A Reuters report from December 2025 suggested China had built a prototype EUV machine, though it hadn't yet produced a working chip. Having even a partial or decommissioned ASML EUV system could potentially aid reverse engineering efforts, even if operating a full system is currently impossible without ASML's support.

Implications for Global AI Development and the Chip War

The underlying tension in this dispute directly impacts the global race for AI dominance. Advanced semiconductors are the bedrock upon which cutting-edge AI models are trained and deployed. Restricted access to ASML's EUV technology means China faces significant hurdles in producing the most powerful AI chips domestically.

The US export controls, expanded in 2023 and 2024, aim to limit China's AI capabilities by cutting off access to high-end chips and advanced chipmaking equipment. While Chinese firms have shown remarkable adaptability and innovation, even developing competitive large language models, they remain marginal producers of advanced AI chips.

This ongoing "chip war" has profound implications:

• AI Leadership: The ability to manufacture advanced chips is directly linked to a nation's capacity for AI innovation and deployment at scale. The US aims to maintain its lead by restricting China's access to foundational technology.
• Economic Impact: US and allied semiconductor companies face reduced revenues from China sales due to export controls. However, the controls are also intended to impede Chinese competitors, potentially benefiting Western AI chip manufacturers like Nvidia in the long run.
• National Security: The US government views advanced chip technology as a national security issue, aiming to prevent its use in ways contrary to its interests.
• Chinese Response: China is doubling down on efforts to achieve chip self-sufficiency, pouring resources into domestic innovation. While challenging, this could eventually lead to breakthroughs that might destabilize the existing global semiconductor ecosystem.

Looking Ahead

The current allegations against ASML add another layer of complexity to an already intricate geopolitical landscape. The lack of public evidence from the US side, combined with ASML's categorical denials, creates an atmosphere of uncertainty.

This situation will likely intensify scrutiny on ASML's operations and could lead to further pressure from Washington on the Netherlands and other allies to tighten export controls even more. Proposals like the "MATCH Act" introduced by US lawmakers in April 2026, which would expand restrictions to DUV immersion lithography machines and ban servicing existing ASML machines in China, signal a continued push for stricter measures.

The outcome of this specific dispute, and the broader chip war, will undoubtedly shape the future trajectory of global AI development, innovation, and economic power for years to come.

Frequently Asked Questions

What are ASML's EUV machines and why are they important for AI?

ASML's Extreme Ultraviolet (EUV) lithography machines are the world's most advanced tools for manufacturing semiconductors. They use extreme ultraviolet light to print incredibly tiny circuits onto silicon wafers. These advanced chips are essential for developing and running cutting-edge AI technologies, including powerful data center AI and complex machine learning models.

What are the US allegations against ASML?

The US government, through Commerce Secretary Howard Lutnick, has expressed concerns to ASML that one of its top-tier EUV lithography machines, or specialized components designed for it, may have reached China in violation of US-led export restrictions.

How has ASML responded to these allegations?

ASML has strongly denied the allegations, stating unequivocally that it has "never shipped an EUV machine to China nor have we shipped to China any component, module or equipment specially designed to be used in an EUV machine." The company highlights the immense size, complexity, limited production, and constant ASML servicing required for these machines, making an unnoticed transfer highly improbable.

What is the broader impact of these export controls on China's AI ambitions?

US export controls on advanced chipmaking technology aim to limit China's ability to produce high-end chips, which are crucial for advanced AI development and deployment. While China is investing heavily in domestic chip innovation and has shown resilience in AI model development, these restrictions significantly hinder its capacity to manufacture the most sophisticated AI hardware at scale, impacting its global AI competitiveness.