ASML denies shipment of EUV lithography to China: error or geopolitical strategy?

What happened?

On April 5, 2025, US Commerce Secretary Howard Lutnick expressed concern in a conversation with ASML executives about the possibility that China had acquired an extreme ultraviolet (EUV) lithography system, the most advanced tool for manufacturing cutting-edge chips. The information, leaked to outlets such as Tom's Hardware, prompted ASML to issue an official statement flatly denying such claims and calling them 'inaccurate rumors damaging to our reputation.' This episode is not an isolated incident but part of a long history of technological tensions between the United States and China, where semiconductors have become the central battlefield of the technological cold war.

Why is it important?

EUV lithography is essential for producing chips below 7 nm, used in artificial intelligence, 5G, and supercomputing. ASML is the world's sole manufacturer of these machines, which cost over $150 million each. Since 2019, the Netherlands, under US pressure, has banned EUV exports to China. If China actually possessed one, it would mean a failure of export controls and a technological leap for Beijing. Moreover, the incident further strains relations between Washington and The Hague and casts doubt on the effectiveness of the sanctions regime. To put it in perspective, China's acquisition of an EUV machine would be comparable to North Korea obtaining an intercontinental ballistic missile: a radical shift in the balance of technological power.

The economic impact is also significant. ASML, headquartered in Veldhoven, Netherlands, reported revenue of €27.6 billion in 2024, and its EUV machines account for approximately 60% of its sales. A total export ban to China, already in effect for EUV, could cost the company up to €2 billion annually in lost revenue, according to analyst estimates. But if China already possesses the technology, sanctions would lose effectiveness, and ASML could face lawsuits or retaliation from both sides.

Consequences and context

This episode adds to an escalation of restrictions: in 2022, the US banned the sale of AI chips to China; in 2023, it expanded sanctions to manufacturing equipment. ASML's denial aims to protect its reputation and avoid commercial retaliation. However, the mere suspicion that China has circumvented restrictions could accelerate new measures from Washington. For example, in October 2022, the Biden administration imposed export controls prohibiting US companies from selling advanced semiconductor chips and equipment to China without a license. That measure caused a 20% drop in ASML's stock in a single day. Now, with this new rumor, ASML shares fell 3% on April 5, though they partially recovered after the statement.

For global tech companies, this means greater supply chain uncertainty and potential delays in advanced chip production. Companies like TSMC, Samsung, and Intel rely on ASML's EUV machines to manufacture 5 nm and smaller chips. If restrictions tighten, they could face equipment shortages or delivery delays. Additionally, China has been heavily investing in its own semiconductor industry, with a five-year plan allocating $1.4 trillion to achieve self-sufficiency by 2030. Although it is still far from producing EUV independently, companies like SMEE (Shanghai Micro Electronics Equipment) have made progress in 28 nm lithography, but the gap with EUV remains enormous.

The historical context is key. In 2018, ASML suffered an intellectual property theft when a former Chinese employee was accused of stealing data on EUV technology. That case ended with a conviction in 2020, but it demonstrated China's interest in obtaining the technology by any means. Furthermore, in 2023, the Netherlands implemented new export restrictions on DUV immersion lithography equipment, which predates EUV but is still crucial for 7 nm chips. This shows a gradual escalation of restrictions, and the current rumor could be the catalyst for a new round of sanctions.

What readers should know

• ASML has formally denied any EUV shipment to China, but the investigation is not concluded. The US Commerce Department has not commented further, and the investigation is expected to continue for weeks.
• EUV technology is the bottleneck of the semiconductor industry; its control is strategic. Without EUV, chips below 7 nm cannot be manufactured cost-effectively.
• China has invested heavily in its own research, but it is still far from producing EUV independently. It is estimated to need at least 10-15 years to catch up with ASML.
• The incident reflects the growing militarization of technology and the fragmentation of the global market. The US-China trade war is reshaping supply chains, and tech companies must prepare for an environment of greater regulatory uncertainty.

“ASML emphasizes that the rumors are inaccurate and damaging to our reputation, and that it strictly complies with all export laws and regulations,” the company stated in its release.

In conclusion, although ASML's denial is forceful, the mere suspicion has already had effects on markets and geopolitics. The key question is whether China has actually managed to circumvent sanctions, or if this is disinformation that could be used to justify even harsher measures. What is certain is that the global semiconductor industry is at a turning point, and this incident is just another chapter in the struggle for technological supremacy.