The US says ASML’s top chip tool may be in China. ASML says it isn’t

U.S. Commerce Secretary Howard Lutnick has leveled a serious accusation against Dutch chipmaker ASML, suggesting one of its highly advanced Extreme Ultraviolet (EUV) lithography machines may have ended up in China. Such a transfer would represent a major breach of U.S. export controls designed to keep cutting-edge semiconductor technology from Beijing. While administration officials claim to have evidence of related shipments, they have not made it public. ASML has issued a firm denial, stating no such machine has ever been on Chinese soil, creating a high-stakes standoff involving the most critical single supplier in the global AI hardware ecosystem.

Context and Controls

ASML holds an absolute monopoly on EUV systems, the only tools capable of printing the microscopic circuits on the world's most advanced processors, including those used by TSMC to manufacture chips for NVIDIA and Apple. This unique position has made it Europe's most valuable tech company. In a recent interview, CEO Christophe Fouquet countered the possibility of a breach by explaining the company's stringent internal controls. He noted that ASML does conduct permitted business in China, selling older-generation Deep Ultraviolet (DUV) tools, which are expected to account for about 20% of its 2026 revenue. The commercial logic of risking this substantial, legal business for a single illicit EUV sale is, from the company's perspective, non-existent.

• Technological Monopoly: ASML is the sole global supplier of EUV lithography machines essential for advanced chips.
• Critical Dependency: All leading-edge semiconductors from foundries like TSMC rely on ASML's EUV technology.
• Internal Safeguards: The company states it tracks every machine ever shipped and maintains a strict internal firewall preventing its China-based employees from accessing EUV technology.
• Financial Stakes: The company's market capitalization is approximately $700 billion, built on its unique and protected technology.

Geopolitical and Commercial Crosscurrents

The Commerce Department's scrutiny comes as it has also invested up to $150 million in xLight, a U.S. startup developing next-generation light-source technology that could challenge a core component of ASML's EUV systems. While no public connection exists, the optics of a federal official scrutinizing a monopoly while his agency funds a potential competitor are notable. This pressure is compounded by a bipartisan bill in Congress aiming to ban all of ASML's DUV tool shipments to China, which would strike a major blow to its revenue. This multi-pronged approach suggests a broader U.S. strategy to not only contain China's technological rise but also potentially cultivate domestic alternatives to critical foreign-held technologies.

This dispute highlights the acute tension between national security objectives and the commercial realities of a deeply interconnected global supply chain. The U.S. government's pressure on ASML, coupled with its investment in a potential competitor, suggests that industrial policy may be increasingly used as a tool to influence both geopolitical rivals and key commercial partners.