The US Alleges ASML's Top Chip Tool May Be in China; ASML Denies

The United States government has raised serious concerns that one of ASML's advanced extreme ultraviolet (EUV) lithography machines, critical for producing the most sophisticated semiconductors, may have found its way to China. This would represent a significant breach of stringent export controls imposed by the US since the first Trump administration, which explicitly bar ASML from selling these cutting-edge systems to Beijing. US Commerce Secretary Howard Lutnick reportedly conveyed these worries to senior ASML executives, though the Dutch chipmaker vehemently denies the allegations, stating no such machine exists or has ever existed in China. ASML, a company largely unknown outside the tech industry, is in fact Europe's most valuable public company and arguably the most crucial player in the global AI buildout after Nvidia and hyperscalers. It holds a unique monopoly on EUV lithography, the sole technology capable of printing the microscopic patterns required for advanced chips used by giants like TSMC, which manufactures for Apple and Nvidia. The alleged presence of even one EUV machine in China would severely undermine the multi-year US strategy to prevent Beijing from acquiring advanced AI capabilities for its military and industrial sectors. ASML CEO Christophe Fouquet has previously addressed the "China question," asserting that the company meticulously tracks every machine it ships, ensuring they are either in active use by monitored customers or returned and dismantled. He highlighted ASML's internal firewall, which isolates employees with access to EUV technology from China-based staff. Fouquet also emphasized the immense complexity of EUV development, arguing that reverse-engineering a machine never possessed by China is practically impossible. Furthermore, ASML's continued sales of older-generation deep ultraviolet (DUV) tools to China are framed as a strategic calculation to maintain a generational gap while securing revenue, not a loophole for advanced tech transfer. Despite the gravity of the US claims, senior administration officials have reportedly declined to provide concrete evidence of an actual EUV system on Chinese soil to either Bloomberg or ASML itself. This lack of public evidence complicates the situation. Adding another layer of intrigue, Commerce Secretary Lutnick's department recently committed taxpayer money to xLight, a startup developing next-generation light-source technology that could potentially challenge or partner with ASML's EUV monopoly. This raises questions about potential conflicts of interest, especially with other ventures like Peter Thiel-backed Substrate also pursuing EUV-rival technology. The dispute is set against a backdrop of broader legislative efforts in the US. A bipartisan bill currently moving through Congress proposes an even more expansive ban, targeting all of ASML's DUV shipments to China. Such a measure would significantly escalate the economic tensions, impacting approximately a fifth of ASML's expected 2026 revenue. Until the US government presents its evidence, judgment remains suspended on these serious allegations, but the implications for global technology supply chains and geopolitical relations are profound.