According to Bloomberg, US Commerce Secretary Howard Lutnick told ASML senior executives at a series of recent meetings that he was concerned that one of the Dutch chipmaker’s extreme ultraviolet lithography machines – its EUV system, the only tool on earth capable of printing the most advanced semiconductor patterns – may have arrived in China. This would be a major violation of export controls that have banned ASML from selling EUV to China since the first Trump administration.
This is a serious claim. Senior officials told Bloomberg they have evidence that ASML shipped EUV-related parts and transportation equipment to China. But they repeatedly refused to show this to Bloomberg or ASML itself. The company said such machines do not exist in China and have never existed. The Commerce Department did not respond to questions from Bloomberg about whether there was evidence of actual EUV systems on Chinese soil.
If you’re outside the chip industry you might think this isn’t worth noting, but it is. ASML is a Dutch company that most people have never heard of, but it is the most important company in global AI deployment other than Nvidia or one of the hyperscalers. This makes it the only machine on the planet capable of EUV lithography, the process that prints the fine circuit patterns that define the most advanced chips.
All cutting-edge processors manufactured by TSMC, the foundry that makes chips for Nvidia and Apple, rely on ASML tools, which took the company roughly 20 years and a whopping billions of dollars to develop. There are currently no secondary suppliers. That exclusivity has made ASML the most valuable listed company in Europe, with a market capitalization of $700 billion as of this week, which has risen sharply over the past year thanks to insatiable demand for AI-based chips.
That scale is why the China issue is so important. If even a single EUV machine falls into Chinese hands, it would be one of the most significant violations of the export control regime the United States has built over the past few years to maintain advanced AI capabilities in China’s military and industrial base.
I met ASML CEO Christophe Fouquet six weeks ago, well before this story came out, and asked him directly about the China issue.
Fouquet said ASML tracks every machine it has ever delivered. These machines are either actively in use by the monitored customer or have been dismantled and returned to the company. He said the company built an internal firewall several years ago. Employees with access to EUV technology, documentation, and training are isolated from those who do not, and ASML’s China-based employees sit on the other side of that wall, by design. He argued that the only reason ASML was able to build an EUV machine was because 80% of it already existed, with decades of prior knowledge, and it took 20 years to solve the truly new problem of generating EUV light itself. His broader point seems to be that you can’t reverse engineer a machine that you’ve never had and no one in China has one.
There is also simpler commercial logic that negates the idea that ASML would risk its export licenses to quietly arm its Chinese customers. ASML sells previous generation deep ultraviolet tools to China. This device was first released 10 years ago. However, Fouquet explicitly framed this as a protective calculation rather than a loophole. The idea he proposed was to leave enough of a generational gap between customers to still do business, but without having to manufacture future competitors themselves. ASML expects about 20% of its 2026 sales to come from sales in China, where it is already permitted. Risking a full EUV ban would jeopardize revenue from a single illegal sale and the company’s position as the most valuable monopoly in the European industry.
None of this proves that the claim is false. The government has not yet released the evidence, and it is worth withholding judgment until it does.
Under Lutnick, the Commerce Department agreed late last year to invest up to $150 million in taxpayer funds in xLight, a startup developing next-generation light source technology that was billed as a long-term challenge to ASML’s core EUV monopoly. xLight’s CEO said last year that the company sees itself as a future partner to ASML rather than a competitor, building hardware to connect to ASML’s machines rather than replace them. When I presented the framework to Fouquet in May, he was polite about it but unconvincing. He made it clear that ASML does not need xLight’s technology to maintain its lead.
Does this have something to do with why Lutnick is suddenly pushing ASML on EUV? There is nothing publicly linking the two. It may be completely unrelated. But federal officials who scrutinize monopolies while their agencies invest money in startups working to improve the monopolies’ core technologies are worth taking a look at.
xLight isn’t the only outside bet on the future of lithography. Peter Thiel, who has long had ties to Trump’s political orbit, has backed Substrate, a separate startup that is explicitly pursuing its own EUV competing technology, with ambitions to compete with ASML more directly than xLight intended.
As Bloomberg noted, bipartisan legislation passing Congress would go much further than EUV. This effectively calls for a ban on all deep ultraviolet (DUV) shipments from ASML to China. The measure accounts for less advanced lithography tools, which account for about a fifth of the company’s projected 2026 revenue. The bill passed a key committee in April, but the Trump administration has not taken an official position on it.
Above photo: ASML CEO Christophe Fouquet
If you purchase through links in our articles, we may receive a small commission. This does not affect our editorial independence.
