US House lawmakers criticize ASML, Tokyo Electron, KLA, and other equipment makers for selling to the Chinese military and helping build China's chip industry
including firms on U.S. restricted lists tied to the Chinese military and surveillance state. https://selectcommitteeontheccp.house.g ov/ ... Jonathan Cheng / @jchengwsj : .@committeeonccp: “Companies...including ASML in the Netherlands...and Applied Materials, KLA, and Lam Research—fueled semiconductor manufacturing in China and made sizeable returns selling equipment to Chinese state-owned and military-linked companies.” https://selectcommitteeontheccp.house.g ov/ ... Dan Nystedt / @dnystedt : US report calls for tighter restrictions on sale of semiconductor equipment to China: 1. US must fill gaps in export controls that allow purchase of advanced machines 2. Work with allies: 45% of non-US tool makers' China revenue came from restricted companies. @committeeonccp : The CCP is using technology developed by the US and its western allies to build the chips that power its military, surveillance, and AI-driven authoritarianism. We must not allow this critical equipment to go to our foremost adversary, or we could lose the technology arms race.
Context & Ripple Effects
This scrutiny follows a period in which Chinese orders for chipmaking equipment climbed sharply, underscoring why tool suppliers’ China exposure has become central to US policy debates.
The US had already moved upstream by telling EDA suppliers to halt China sales in a separate 2025 restriction. The committee’s report broadens the focus from individual technologies to alleged gaps in equipment sales through allied vendors.
First-order effects
- ASML, Tokyo Electron, KLA, Applied Materials and Lam Research face intensified congressional scrutiny over sales to Chinese state-owned, military-linked and restricted-list customers.
- The report puts immediate pressure on US export-control agencies to examine the alleged gaps and on the named suppliers to reassess customer screening and China-facing sales.
Second-order effects
- A push for tighter rules would require closer alignment with the Netherlands and Japan, since unilateral US restrictions leave non-US toolmakers as potential channels for sales.
- Chinese chipmakers dependent on imported manufacturing tools could face greater procurement uncertainty, reinforcing incentives to build domestic alternatives as access to foreign equipment tightens.
Third-order effects
- If allied controls increasingly target end customers and equipment categories rather than only the most advanced chips, chipmaking tools will become a more durable point of geopolitical leverage.
- The dispute highlights the trade-off facing global equipment suppliers: China revenue can remain commercially important while customer-level compliance risks become more consequential.
The trend: Semiconductor export controls are shifting from restrictions on leading-edge chips toward coordinated scrutiny of the equipment and customer networks that build domestic chip capacity.