The US says ASML’s top chip tool may be in China. ASML says no

According to Bloomberg, US Commerce Secretary Howard Lutnick, in a series of recent meetings, told ASML’s senior management that he is concerned that one of the Dutch chipmaker’s most dangerous ultraviolet lithography machines – EUV systems that are the only tools in the world capable of printing highly advanced semiconductor patterns – may have ended up in China. That would be a major violation of export controls that have barred ASML from selling EUV to China since the Trump administration.

It is a serious claim. Senior administration officials have told Bloomberg they have evidence that ASML has shipped EUV-related equipment and supplies to China, though they have declined, repeatedly, to show it — to Bloomberg or, apparently, to ASML itself. The company says there is no such machine in China and never has been. The Commerce Department did not respond to Bloomberg’s questions about whether it has evidence of an actual EUV program on Chinese soil.

You might think that this isn’t worth paying attention to if you’re outside the chip industry, but it is. ASML is a Dutch company that most people have never heard of, but, by and large, the most important company in global AI development not named Nvidia or one of the hyperscalers. It makes the only equipment in the world capable of EUV lithography – the process of printing the tiny circuit patterns that define the most advanced chips.

Every high-end processor made by TSMC, the foundation behind Nvidia and Apple chips, relies on ASML tools that have taken the company nearly two decades and countless billions to develop. Currently, there is no secondary supplier. That dominance has made ASML Europe’s most valuable public company, with a market capitalization that traded in the region of $700 billion as of this week, rising sharply over the past year due to pent-up demand for the AI-driven chip.

That scale is why the China question is so important. If even one EUV device reached the hands of the Chinese, it could represent a violation of the export control laws the US has put in place over the past few years to keep advanced AI capabilities out of Beijing’s military and industrial base.

I sat down with ASML CEO Christophe Fouquet six weeks ago, before this story came out, and asked him directly about the China question.

Fouquet told me that ASML tracks every machine that has ever been shipped — whether it’s in use with monitored customers or dismantled and returned to the company. He said the company has built an internal firewall over the years: employees who have access to EUV technology, documentation, and training are walled off from those who can’t, and ASML’s China employees live on the wrong side of that wall by design. He argued that the only reason ASML could build an EUV machine at all was that 80% of it already existed from decades of prior knowledge, and that solving a truly new problem – generating EUV light itself – took 20 years itself. His broader point seemed to be that you can’t reverse engineer a machine you’ve never had, and no one in China has.

It also makes simple commercial sense that cuts through the idea that ASML would risk its export license to quietly arm a Chinese customer. ASML sells old-generation deep ultraviolet equipment in China — gear that began shipping ten years ago — but Fouquet clearly framed it as a protective figure, not a loophole. The idea, he suggested, is to keep enough of a gap that customers can still do business with – but without producing future competitors. ASML expects about 20% of its 2026 revenue to come from sales that have already been approved to China. Risking a total EUV ban would put that revenue, as well as the company’s position as the most important monopoly in the European industry, on the line for one illegal sale.

None of this proves that these allegations are false. The government has yet to present its evidence publicly, and it is appropriate to withhold judgment until it does.

The Commerce Department, under Lutnick’s leadership, agreed late last year to put up to $150 million in taxpayer money into xLight, a startup developing next-generation light source technology that has been labeled a long-term challenge to ASML’s core EUV mandate. An xLight executive told me last year that the company sees itself as ASML’s future partner, not a competitor, building hardware meant to plug into ASML equipment rather than replace it. When I put that outline to Fouquet in May, he was polite about it but not convinced; ASML, he made clear, does not see himself needing xLight technology to continue to lead.

Does that have anything to do with why Lutnick is suddenly pushing ASML to EUV? There is nothing public linking the two. It may not be related at all. But a government official considering a monopoly while his agency has money riding on angling for startups to develop that key monopoly technology should be scrutinized.

xLight is not the only foreign bet on the future of lithography. Peter Thiel — who has long-standing ties to Trump’s political trail — has backed Substrate, a separate startup that is clearly pursuing its rival EUV technology, with ambitions to compete with ASML more directly than xLight says it aims to do.

As Bloomberg notes, the bipartisan bill passed in Congress would go much further than EUV — it requires effectively banning all shipments of deep ultraviolet (DUV) ASML to China, the less advanced lithography tools that make up about a fifth of the company’s expected revenue by 2026. The bill cleared a key committee in April, and the Trump administration has not taken an official position on it.

Pictured above: ASML CEO Christophe Fouquet