ASML back in the crosshairs as US seeks to tighten China export restrictions

The US government is once again pressing the Netherlands to further restrict exports of chip machines made by Veldhoven-based ASML to China. Washington wants the Netherlands to ban the sale of virtually all advanced lithography machines to Chinese customers, according to multiple media reports. For ASML, the only company in the world that produces EUV machines, this represents a repetition of what has become a familiar pattern.

ASML was founded in 1984 as a joint venture between ASM International and Philips, and has grown into one of the most strategically significant technology companies in the world. The company's machines are indispensable for manufacturing the most advanced chips, which are in turn used in everything from smartphones to military systems. That central position in the global chip supply chain makes ASML attractive to customers and investors, but also vulnerable to geopolitical pressure from outside.

China is a significant market for ASML. Although the most advanced EUV machines have been barred from export to China for years, the company still sells older DUV lithography machines there. It is precisely that trade that Washington now wants to restrict further.

How the export restrictions accumulated

The export restrictions surrounding ASML date back to 2019, when the Dutch government, at US request, stopped issuing export licences for the latest EUV machines destined for China. That decision had direct consequences for ASML: an order from Chinese chipmaker SMIC could not be fulfilled as a result.

In the years that followed, the rules were tightened in stages. In 2023, the Dutch cabinet announced that it would also restrict exports of certain DUV machines, the somewhat older generation of lithography machines that China had still been able to procure. Since then, an export licence has been required for every delivery of those machines to Chinese customers, and such licences are not granted automatically.

Insiders are now signalling that the US is stepping up pressure to halt the remaining DUV exports almost entirely. This places the Netherlands in a difficult position: on one hand there is the alliance relationship with the US, while on the other, new restrictions directly affect the commercial interests of one of the largest listed Dutch companies.

What China means for ASML's revenue

ASML reported revenue of €32.7 billion for 2025. China has been one of its largest markets in recent years: in some quarters, China accounted for more than a quarter of total revenue, though that share varies considerably from period to period.

A near-total ban on exports to China would hit that revenue contribution hard. Analysts and the company itself have repeatedly pointed to the risks that further export restrictions pose to financial forecasts. ASML has an indicative net profit target of approximately €14.9 billion for 2026, with even higher revenue and profit expectations projected for 2027 and 2028. Whether those forecasts remain achievable under stricter restrictions depends in part on how quickly other markets can absorb Chinese demand.

ASML bought back approximately €1.1 billion of its own shares in the second quarter of 2026, signalling confidence in its own balance sheet. Shareholders' equity stood at just over €18.4 billion at the end of 2024.

A company that cannot function without international cooperation

The geopolitical pressure is all the more difficult to manage because ASML itself is heavily dependent on international suppliers. The high-powered CO₂ lasers that are central to EUV technology are supplied by Germany's TRUMPF. The precision optics come from Carl Zeiss AG, another German party in which ASML has taken a minority stake to secure the partnership.

In 2012, ASML acquired American light source manufacturer Cymer for nearly €2 billion, in order to bring the development of EUV light sources further in-house. That same year, major customers including Intel, TSMC and Samsung invested in ASML through a co-investment programme to help finance the further development of lithography technology.

This interdependence with American and other Western partners makes ASML part of the Western technology bloc on one hand, while on the other making it receptive to the political wishes of those same partners. CEO Christophe Fouquet and his predecessor have on multiple occasions publicly emphasised that ASML complies with applicable laws and regulations, while at the same time advocating for a consistent and predictable export policy.

The Netherlands as decision-maker in a larger game of chess

Formally, it is the Dutch government that grants export licences and therefore holds the decisive say over what ASML may and may not supply. In practice, the room for manoeuvre is limited: through bilateral agreements and pressure on allies, the US exerts significant influence over the export policies of countries that possess critical chip technology.

The Netherlands is not alone in this. Japan, which also holds a key position in the chip supply chain through Tokyo Electron and other suppliers, has introduced similar restrictions under comparable US pressure. Coordination between these countries runs partly through diplomatic channels and partly through multilateral export control regimes.

For Dutch politics, the situation is delicate: ASML accounts for tens of thousands of direct and indirect jobs, a substantial share of Dutch export value, and serves as an anchor for the broader Brainport ecosystem around Eindhoven. Every new export measure therefore affects not just a listed company, but also a region and an industrial network that has been built up over decades.

For other European technology companies in a comparable geopolitical position, the ASML case illustrates how quickly a dominant market position in a strategic sector can become a political liability. Policymakers in Brussels and national capitals thinking about European technological sovereignty see in ASML a concrete example of what is at stake when dependencies in global supply chains are converted into political leverage.