On Tuesday, October 22, Christophe Fouquet, the CEO of the Dutch lithography machine manufacturer ASML Holding NV, predicted that the United States will exert greater pressure to further restrict the sale of semiconductor technology to China. He pointed out that under the current sanctions, China’s chip technology lags behind by more than 10 years.
China is ASML’s largest market. Fouquet mentioned during an interview at the Bloomberg Technology Summit in London that given the geopolitical situation, it is apparent that the U.S. will continue to apply pressure on its allies to implement more restrictions on exports to China.
The U.S. has been imposing sanctions on China to prevent the country from utilizing advanced chip technology for military expansion and surveillance of its people. Export controls have been implemented multiple times concerning the sale of advanced AI chips and chip manufacturing equipment.
ASML is a focal point in the U.S.-China chip war. Lithography technology is crucial for chip manufacturers, with ASML being the sole global producer of Extreme Ultraviolet (EUV) equipment. EUV lithography machines are necessary for producing the most advanced chips used in various applications from electric vehicles to military equipment.
Huawei and SMIC rely on ASML’s DUV lithography machines to manufacture advanced chips. China has been unable to produce similar versions of lithography equipment and is also unable to purchase ASML’s EUV machines, which are used to produce the most advanced chips in the world, including those used by companies like Nvidia and Apple.
Fouquet stated that under the existing sanctions imposed by the U.S. on China, the country is “10 to 15 years behind in advanced (chip) technology.” In September, the Dutch government announced new export control rules requiring ASML to obtain licenses to provide spare parts and software updates for computer chip manufacturing equipment previously sold to Chinese customers and now subject to export restrictions.
In the past five quarters, China has been ASML’s largest market, with sales of 2.79 billion euros (3 billion US dollars) in the most recent quarter, accounting for nearly half of the company’s total revenue. Fouquet mentioned that due to a backlog of orders during the pandemic, demand from China has increased. The company anticipates that sales to China next year will decrease to around 20% of total revenue.
Fouquet mentioned on Tuesday that the chip industry and ASML will see expansion next year. He also said, “We expect 2026 to be a growth year as well, but it’s still too early to quantify that at this point.”
ASML’s largest individual customer remains TSMC. The U.S. Department of Commerce is investigating whether TSMC, which manufactures high-demand AI chips for Nvidia, is also producing intelligent phones or AI chips for Huawei.
Meanwhile, according to the latest news from the U.S. government, the review of restrictions on sensitive technology investments in AI, semiconductors, and quantum computing for China has entered its final stages. Reuters reported that the final rules are expected to be announced within the next week or few weeks.
In September, Fouquet mentioned that restrictions on exports to China are a bipartisan concern in the U.S., stating, “So I think regardless of what happens in November, this will continue.” He was referring to the U.S. presidential election in November.