A look at Dutch company ASML, the global leader in $150M+ EUV chip making machines, which are used by firms like TSMC and are subject to export bans to China
A $150 million chip-making tool from a Dutch company has become a lever in the U.S.-Chinese struggle. It also shows how entrenched the global supply chain is.
Context & Ripple Effects
This 2021 explainer captures the moment ASML's EUV machine — a $150M tool only ASML's EUV bet made possible, and one TSMC depends on — turned from an engineering marvel into a geopolitical instrument, with export bans keeping it out of China. The years of coverage that follow show the ban straining at the edges: an ASML IP-infringement claim against a Chinese affiliate in 2022, and by 2024 reporting that the Dutch let ASML keep exporting to China after lobbying to offset weak demand elsewhere.
By 2026 the enforcement question had come home: Commerce Secretary Howard Lutnick questioned ASML leadership over concerns China acquired an EUV machine in violation of export restrictions, while the Netherlands simultaneously lobbied to keep immersion DUV sales to China open. The article's core point — how entrenched this single-supplier supply chain is — is exactly why each of those later fights matters.
First-order effects
- The export ban immediately cuts ASML off from Chinese customers for its most advanced tool while leaving its TSMC-led Western demand intact — making China revenue a policy variable, not a market outcome.
- TSMC's access to EUV is preserved, hardening its position as the sole merchant route to cutting-edge chips and tying its fortunes to US export policy.
Second-order effects
- Denied legitimate access, Chinese firms push around the ban — the 2022 IP-infringement allegation against a Chinese company's affiliate is the domestic-substitution response the controls were designed to provoke.
- The Netherlands, dependent on ASML's export revenue when demand elsewhere is weak, lobbies Washington to keep DUV sales flowing, turning allied enforcement into a recurring negotiation rather than a settled rule.
Third-order effects
- If the pattern holds, chipmaking equipment becomes a permanently controlled dual-use category, with the chokepoint supplier's home government as the enforcement bottleneck — and every alleged violation, like the EUV machine Commerce questioned ASML about in 2026, testing whether allied controls have teeth.
- Sustained restrictions accelerate China's push for domestic lithography alternatives, threatening the very monopoly that gives the controls their leverage — a slow erosion risk ASML's IP claims are an early signal of.
The trend: Chipmaking equipment export controls are becoming the central instrument of US-China tech competition, with allied-government enforcement — not the rules themselves — as the recurring weak point.