U.S. raises China EUV fears; ASML denies transfer

ASML EUV – The U.S. says it suspects ASML equipment capable of extreme ultraviolet (EUV) lithography may have ended up in China, which would violate export controls. ASML says it has no EUV machine in China and that it has never existed there—while the Commerce Departmen

For the chip world, the name ASML sits in the background—until it doesn’t. Now, it’s at the center of a high-stakes dispute that could reshape how far export controls can be enforced.

U.S. Commerce Secretary Howard Lutnick has told senior ASML executives that he’s concerned one of the Dutch chipmaker’s extreme ultraviolet lithography machines—EU V systems described as the only tools on Earth capable of printing the most advanced semiconductor patterns—may have ended up in China.

That worry is not casual. The U.S. has barred ASML from selling EUV to China since the first Trump administration. If a machine—or even proof of one’s arrival—were to be confirmed in China, it would represent a major breach of those export controls.

Behind the scenes, senior administration officials have told Bloomberg they have evidence that ASML shipped EUV-related components and transport equipment to China. They have declined, repeatedly, to show it—both to Bloomberg and, apparently, to ASML itself.

ASML’s position is blunt: no such machine exists in China, and it has never existed there. The Commerce Department, led by Lutnick, has not responded to Bloomberg’s questions about whether it has evidence of an actual EUV system on Chinese soil.

The human tension here isn’t confined to boardrooms. EUV machines are the gatekeepers of the most advanced chips, and the system around them is tightly controlled. ASML makes the only machines on the planet capable of EUV lithography—the process of printing microscopic circuit patterns that define cutting-edge processors.

Every cutting-edge processor made by TSMC—the foundry behind chips for Nvidia and Apple—depends on ASML tools developed over roughly two decades and at enormous cost. At present, there is no second supplier. That’s why the question of China isn’t just a policy headline; it touches the core of global AI hardware supply.

ASML’s size reflects that reality. The company is Europe’s most valuable public firm, with a market capitalization that has been trading around $700 billion as of this week, rising sharply over the past year on the back of AI-driven chip demand.

Six weeks before this story broke, ASML CEO Christophe Fouquet met the question directly. He told me ASML tracks every machine it has ever shipped—either in active use with monitored customers or dismantled and returned to the company.

Fouquet also described an internal barrier built to prevent leakage of EUV know-how. He said ASML built a firewall years ago: employees who can access EUV technology. documentation. and training are walled off from those who can’t. and ASML’s China-based staff sit on the wrong side of that wall by design. In his view. the very idea of replication falls apart because the only reason ASML could build an EUV machine at all was that 80% of it already existed from decades of prior knowledge. while the one genuinely new problem—generating EUV light itself—took 20 years to solve. Fouquet’s argument was that you can’t reverse-engineer a machine you’ve never had. and nobody in China has had one.

There’s also a commercial logic that ASML says cuts against the allegation. Fouquet said ASML does sell older-generation deep ultraviolet tools to China—gear first shipped a decade ago—but he framed that as protective. not a workaround. The goal. he suggested. is to preserve enough of a generational gap that customers can still do business without gaining the ability to manufacture ASML’s future competitor.

ASML expects roughly 20% of its 2026 revenue to come from already-permitted sales to China. For the company, risking the EUV ban entirely would threaten both that revenue stream and its position as the most valuable monopoly in European industry over a single illegal sale.

Still, none of that proves the allegations are false. The government has not made its evidence public. And until it does—or until ASML is shown what is being claimed—this remains a clash of assertion rather than a verified record.

The dispute lands at a moment of pressure inside the same policy ecosystem. Under Lutnick’s leadership. the Commerce Department agreed late last year to put up to $150 million of taxpayer money into xLight. a startup developing a next-generation light-source technology. xLight has been written about as a long-term challenge to the core of ASML’s EUV monopoly.

xLight’s CEO told me last year that the company sees itself as a future partner to ASML. not a rival—building hardware meant to plug into ASML’s machines rather than replace them. When I put that framing to Fouquet in May, he was polite about it but unconvinced. ASML, he said clearly, doesn’t see itself as needing xLight’s technology to keep its lead.

There’s no public link connecting all of these threads. Nothing in the record ties Lutnick’s renewed push on EUV to the agency’s investment in xLight. It could be unrelated.

But one thing is hard to ignore: a federal official scrutinizing the behavior of a global monopoly while the same federal apparatus is investing money in a startup aimed at the monopoly’s core technology is the kind of situation that invites close attention.

xLight isn’t the only outside bet on lithography’s future. Peter Thiel, who has his own long-running ties to Trump’s political orbit, has backed Substrate, another startup pursuing its own EUV-rival technology. Substrate’s ambitions are to compete more directly with ASML than xLight says it intends.

And even the legislative track is adding pressure. As Bloomberg notes. a bipartisan bill moving through Congress would go further than EUV alone: it would call for an effective ban on all of ASML’s deep ultraviolet (DUV) shipments to China. Those tools are less advanced than EUV and account for roughly a fifth of the company’s expected 2026 revenue. The bill cleared a key committee in April, and the Trump administration hasn’t taken a formal position on it.

For now, ASML is standing by a simple claim: no EUV system exists in China. The U.S. is pointing to concern and undisclosed evidence. Between them sits the export-control regime built over years—and the reality that, when it comes to EUV lithography, there is no obvious substitute.

ASML EUV lithography China export controls Howard Lutnick Christophe Fouquet xLight Substrate TSMC deep ultraviolet DUV semiconductor manufacturing