US officials raise concerns over ASML equipment in China

According to Bloomberg, U.S. Commerce Secretary Howard Lutnick has expressed concern that an ASML extreme ultraviolet lithography (EUV) machine may have ended up in China. Senior administration officials claim to have evidence that ASML shipped EUV-related components and transport equipment to China, though they have declined to share it. ASML, however, asserts that no EUV machine exists in China and has never existed there.

ASML is a critical bottleneck in the global artificial intelligence supply chain. The company holds a monopoly on EUV lithography—the process of printing microscopic circuit patterns. Every processor made by TSMC, the foundry (chip manufacturing factory) behind Nvidia’s chips, depends on ASML tools. Developing the technology to generate EUV light took 20 years on its own, though ASML CEO Christophe Fouquet noted that 80% of the machine already existed from prior knowledge. This monopoly has helped drive ASML’s market capitalization to in the neighborhood of $700 billion.

Fouquet has defended the company’s security protocols. In an interview six weeks ago, he stated: “ASML tracks every machine it has ever shipped — they’re either in active use with monitored customers or have been dismantled and returned to the company.” The company maintains strict internal firewalls to prevent China-based staff from accessing EUV technology. Additionally, ASML expects roughly 20% of its 2026 revenue to come from permitted sales of older deep ultraviolet (DUV) lithography systems to China. Risking its export licenses would jeopardize this revenue over a single “illegal sale.”

Meanwhile, the U.S. government is exploring alternative technologies. The Commerce Department has agreed to put up to $150 million of taxpayer money into xLight, a startup developing next-generation light-source technology. Other private efforts are also emerging; investor Peter Thiel has backed Substrate, a startup pursuing EUV-rival technology. These developments come as a bipartisan bill, which cleared a key committee in April, seeks to ban all DUV shipments to China, potentially threatening a portion of ASML’s expected 2026 revenue.

Why it matters

ASML is the most critical company in the global AI buildout outside of Nvidia. A confirmed shipment of an EUV machine to China would represent “one of the most consequential breaches of the export-control regime” designed to keep advanced AI capabilities out of Beijing’s military and industrial base.