ASML, a leading Dutch semiconductor manufacturing company, has reiterated that it does not export cutting-edge technologies such as cutting-edge extreme ultraviolet (EUV) exposure equipment to China. This is driven by the tightening of U.S. export controls against China and the resulting rise in geopolitical tensions.

Denial of Advanced Technology Exports and Strict Management

ASML, the world’s largest semiconductor manufacturing company, has completely denied the possibility that the state-of-the-art EUV lithography system raised by the U.S. government has entered China, providing concrete evidence. According to documents distributed by ASML in Washington, there are currently 314 EUV devices operating worldwide, of which 26 are out of service, but none have been confirmed in China. EUV lithography equipment is about the size of a school bus and is produced in extremely limited quantities, allowing for strict management. They also explained that these devices require ongoing maintenance by ASML technicians, and that it is physically impossible for customers to remove, transport, or relocate the equipment without the company’s support. The company emphasized that it has established systems to automatically detect abnormal behavior and disconnections within its product portfolio, and that there are no signs of unauthorized technology leaks that the U.S. side suspects. Please refer to the diagram below.

Sharp Drop in Sales Ratio in the Chinese Market

Before U.S. export controls took full effect, China was ASML’s largest single market, accounting for about 50% of its sales as of Q2 2024. However, due to subsequent regulatory tightening, the sales ratio to China in the first quarter of 2026 plummeted to 19%. This rapid change is directly related to the Dutch government’s introduction of export permit systems not only for state-of-the-art EUV equipment but also for some deep ultraviolet (DUV) immersion lithography equipment. Christoph Huke, CEO of ASML, stated that the current outlook already incorporates fluctuations from export restrictions, suggesting that adjustments to reduce dependence on the Chinese market are progressing rapidly. The company expects its future contribution to sales in the Chinese market to remain around 20%, forcing a structural shift away from its former major markets.

Political Conflict and Geopolitical Pressure

Further restrictions imposed by the MATCH bill

Currently, the U.S. Congress is deliberating the Hardware Technology Management Multilateral Coordination Act (MATCH Act), which poses a new threat to ASML. The bill’s core is to ban exports not only of EUV equipment that are already restricted but also of all models of DUV immersion lithography equipment, an older generation of technology, to China, and even to block the provision of maintenance services to existing Chinese customers. If this bill passes and is enforced, ASML’s current service revenue in the Chinese market will also be at risk, potentially dealing a serious blow to the company’s revenue base. The U.S. side is concerned that China might use these devices for military use or for technological development that could undermine U.S. security, and is increasing pressure on its ally, the Netherlands, to comply with its own regulatory standards.

Dutch Government’s Claim to Trade Sovereignty

In response to the U.S.’s hardline stance, the Dutch government has fiercely opposed it, calling it an “infringement on trade sovereignty.” Dutch Trade Minister Scholtzma visited Washington and criticized extraterritorial measures like the MATCH bill as seriously infringing on the country’s trade autonomy. While the Dutch side agrees with preventing the leakage of sensitive technology, it emphasizes that this issue should be decided based on voluntary agreement, not coercion from other countries. It also expresses concern that ASML, Europe’s largest technology company, could suffer irreparable damage, intensifying diplomatic efforts to curb the unilateral expansion of U.S. regulations. This situation highlights the structural friction between the security-focused United States and its allies seeking to protect economic interests and sovereignty.

Future Market Environment and China’s Self-Reliance

Upward revision of earnings outlook supported by AI demand

While struggling in the Chinese market, ASML has revised its full-year 2026 earnings forecast upward, driven by the global demand growth driven by the AI boom. The company is raising its sales forecast range from the previous 34 billion to 39 billion euros to 36 billion to 40 billion euros. In particular, major customers such as South Korea’s Samsung Electronics and SK Hynix, and Taiwan’s TSMC are actively procuring ASML’s advanced equipment to expand production capacity for high-bandwidth memory (HBM) and cutting-edge logic chips, which are essential for building AI infrastructure. Of new equipment sales in Q1 2026, memory production accounted for 51%, with strong AI-related investments absorbing the decline in the Chinese market. The company has successfully commercialized the next-generation high-cost device “High-NA EUV” and is outlining a strategy to maintain long-term growth momentum by shifting its business focus to growth markets such as South Korea and Taiwan. Please refer to the diagram below.

Development of proprietary technology by China for survival

ASML’s technology blockade and tightened U.S. regulations have ultimately forced China’s semiconductor industry to accelerate the development of proprietary technologies. ASML’s CEO Fuke has warned that restricting access will only accelerate China’s own creation of competing tools, likening it to “a person in a desert building a garden for survival.” In fact, Chinese company PRINANO announced that it has succeeded in manufacturing optical chip wafers using “nanoimprint lithography (NIL)” technology without relying on ASML’s DUV equipment. This technology holds the potential to significantly reduce manufacturing costs compared to conventional optical exposure, potentially making it a promising market in China, where importing ASML-made equipment is difficult. Additionally, the construction of a closed supply chain centered on Huawei is progressing, and geopolitical pressures are decisively shaping the polarization of the global semiconductor ecosystem.

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