The US says ASML’s top chip tool may be in China. ASML says it isn’t

In a recent series of discussions, U.S. Commerce Secretary Howard Lutnick expressed concerns to ASML executives regarding the possibility that one of the company's extreme ultraviolet (EUV) lithography machines may have found its way to China. This claim, if substantiated, would signify a significant violation of U.S. export controls that have prohibited ASML from selling EUV machines to China since the Trump administration. According to senior administration officials, there is purported evidence indicating that ASML has shipped components and transport equipment related to EUV technology to China. However, they have not disclosed this evidence to Bloomberg or to ASML, which firmly denies the existence of any EUV machine in China. ASML, a Dutch company that plays a crucial role in the global semiconductor industry, produces the only machines capable of EUV lithography. This technology is essential for manufacturing the most advanced chips, including those used by leading firms like Nvidia and Apple. The company has invested nearly two decades and significant financial resources into developing these machines, which has established it as Europe's most valuable public company, with a market cap around $700 billion, driven largely by soaring demand fueled by artificial intelligence advancements. The implications of a potential breach are profound. Should an EUV machine be discovered in China, it could severely undermine the U.S. export control measures designed to restrict advanced AI technology from enhancing China's military and industrial capabilities. In a conversation with ASML CEO Christophe Fouquet, he assured that the company meticulously tracks the location of every machine it has shipped. Any units are either actively utilized by authorized customers or returned to ASML after use. Fouquet emphasized that ASML's internal protocols prevent unauthorized access to EUV technology, with their China-based employees intentionally positioned away from sensitive EUV data. He further explained that while ASML does sell older-generation deep ultraviolet tools to China, this strategy is aimed at maintaining a technological gap, ensuring ongoing business without fostering a future competitor. While the allegations remain unproven until the government releases its evidence, the scrutiny surrounding ASML coincides with a broader context of U.S. government interest in startups like xLight, which is developing competing lithography technology. This raises questions about potential conflicts of interest, especially considering federal investments in technologies aimed at challenging ASML's dominance. Moreover, legislative efforts are underway that could ban all deep ultraviolet shipments to China, which would impact ASML's projected revenues from its existing products in the region. The situation is evolving, and stakeholders are urged to monitor developments closely as the U.S. government navigates the complexities of international trade and technological supremacy in the semiconductor industry.