The US says ASML’s best chip tools may be located in China. ASML says it is not

According to Bloomberg, US Commerce Secretary Howard Lutnick, in a series of recent meetings, told senior ASML executives that he was concerned that one of the Dutch chipmaker’s extreme ultraviolet lithography machines — UV systems that are the only tools on Earth capable of printing the most advanced semiconductor patterns — may have ended up in China. This would be a major violation of export controls that have prevented ASML from selling UV to China since the first Trump administration.

It’s a serious claim. Senior administration officials told Bloomberg they had evidence that ASML shipped EUV-related components and transportation equipment to China, though they refused, repeatedly, to show it — to Bloomberg or, apparently, to ASML itself. The company says there is no such machine in China and never existed there. The Commerce Department did not respond to Bloomberg’s questions about whether it had evidence of an actual UV system on Chinese soil.

You might think this isn’t worth paying attention to if you’re outside the chip industry, but it is. ASML is a Dutch company that most people have never heard of, but it is, by far, the most important company in building global AI that does not bear the name Nvidia or one of the hyperscalers. It makes the only machines on the planet capable of UV lithography — the process of printing microscopic circuit patterns that define the most advanced chips.

Every high-end processor made by TSMC, the foundry of Nvidia and Apple’s chips, relies on ASML tools that took the company nearly two decades to develop and untold billions. There is currently no second supplier. The monopoly has made ASML the most valuable public company in Europe, with its market capitalization trading in the $700 billion range as of this week, a sharp rise over the past year on the back of insatiable demand for AI-driven chips.

This scale is precisely why the China question is so important. If a single UV machine reaches China’s hands, it would represent one of the most significant violations of the export control regime that the United States has built over the past several years to keep advanced AI capability out of Beijing’s military and industrial base.

I sat down with ASML CEO Christophe Fouquet six weeks ago, long before this story broke, and asked him directly about China.

Fouquet told me that ASML tracks every machine ever shipped—it’s either in active use with monitored customers or has been disassembled and returned to the company. He said the company built an internal firewall years ago: employees who have access to UV technology, documentation and training are isolated from those who can’t, and ASML’s China-based employees sit on the wrong side of that wall by design. The only reason ASML could build a UV machine at all, he said, was that 80% of it already existed from decades of prior knowledge, and that solving the truly new problem — generating UV light itself — took 20 years on its own. His broader point seems to be that you can’t reverse engineer a machine you’ve never owned, and no one in China has ever owned such a machine.

There is also a simpler business logic that flies in the face of the idea that ASML would risk its export license to quietly arm a Chinese client. ASML already sells older-generation deep-UV instruments to China — equipment that first shipped a decade ago — but Fouquet framed that explicitly as a precautionary calculation, not a loophole. The idea, he suggested, is that it maintains enough of a generation gap that customers can still do business — but without a competitor manufacturing it in the future. ASML expects approximately 20% of its 2026 revenue to come from already permitted sales to China. Risking a full EUV ban would put these revenues, and the company’s position as the most valuable monopoly in European industry, at stake over a single illegal sale.

None of this proves that the allegations are false. The government has not yet released its evidence publicly, and it would be helpful to withhold judgment until it does.

The Commerce Department, under Lutnick’s leadership, late last year agreed to allocate up to $150 million in taxpayer money to xLight, a startup developing next-generation light source technology that was written as a long-term challenge to the core of ASML’s UV monopoly. xLight’s CEO told me last year that the company sees itself as a future partner of ASML, not a competitor, building devices that aim to connect ASML devices rather than replace them. When I showed this frame to Fouquet in May, he was polite about it but unconvinced; He explained that ASML does not see itself needing xLight technology to maintain its progress.

Does this have anything to do with why Lutnick suddenly pushed ASML over EUV? There is nothing overtly linking the two. It can be completely irrelevant. But a federal official examining a monopoly while his agency has money dependent on a startup seeking to improve that monopoly’s core technology is worth examining.

xLight isn’t the only outside bet on the future of lithography. Peter Thiel — who has long-standing ties to Trump’s political orbit — has backed Substrate, a separate startup explicitly pursuing a rival technology to EUV, with ambitions to compete with ASML more directly than xLight says it intends to.

As Bloomberg notes, a bipartisan bill moving through Congress would go much further than EUV — it calls for an effective ban on all ASML shipments of deep ultraviolet (DUV) to China, the less advanced lithography tools that account for roughly a fifth of the company’s projected 2026 revenue. A key committee approved the bill in April, and the Trump administration has not taken a formal position on it.

Pictured above: ASML CEO Christophe Fouquet