ASML’s chip equipment sales to China soar 109% despite US export curb push

ASML’s sales to China rose dramatically in the third quarter. They increased 109 per cent compared with the second quarter. This matters because the growth came while Washington was pressing the Netherlands to impose tighter controls on exports to China.

The increase lifted China’s share of ASML’s machine sales to 23 per cent, from 14 per cent previously. ASML expects China to account for about 20 per cent of its total sales this year. The figures show that Chinese demand remains strong despite the political pressure.

ASML expects demand from China to stay strong in 2027 and beyond. Roger Dassen linked that outlook to China’s expanding chip capacity. However, proposed restrictions could change which machines ASML can sell there, especially less advanced lithography systems.

The increase was unusually large: ASML’s sales to China climbed 109 per cent in the third quarter compared with the previous three months. In practical terms, that means sales more than doubled in a single quarter. The result stands out because export restrictions were already becoming a major concern.

China represented 23 per cent of ASML’s machine sales in the third quarter. That was up from 14 per cent in the second quarter. The change shows that Chinese customers bought a significantly larger portion of ASML’s equipment during the period.

ASML expects China to contribute about 20 per cent of total sales this year. The company also expects Chinese demand to remain strong in 2027 and later, as the country builds more chip capacity. Future restrictions could affect that trajectory.

ASML is a Dutch company that makes semiconductor manufacturing equipment. Its most important products include lithography machines. In standard chipmaking, lithography uses controlled light to transfer extremely small circuit patterns onto a semiconductor wafer, where the chip’s structures are built.

This equipment matters because the patterns determine how components are arranged on a chip. ASML’s business includes advanced extreme ultraviolet, or EUV, machines and non-EUV systems. The article says EUV sales are expected to rise by more than 45 per cent in 2026.

ASML’s technology is central to the capacity plans of chip manufacturers. The company says customers are seeking more machines for 2028, 2029 and even 2030. That demand helps explain ASML’s planned capacity expansion and the intense international debate over its exports to China.

The United States is pressing the Netherlands to limit China’s access to ASML’s chipmaking equipment. The article specifically links the pressure to Washington’s proposed Match Act. That proposal aims to further restrict ASML’s ability to export less advanced lithography machines to China.

The stated mechanism is export control. If the Netherlands agrees to tighter rules, ASML would face additional limits on which equipment it can ship to Chinese customers. Dutch Prime Minister Rob Jetten said he was confident the Netherlands and the United States would reach an agreement.

The issue matters because Chinese customers currently generate substantial demand for ASML. China’s machine-sales share rose to 23 per cent in the third quarter. The proposed restrictions therefore create a direct tension between ASML’s growing sales and geopolitical pressure over technology exports.

Foreign equipment restrictions can make it harder for China to add chipmaking capacity. Chip factories need specialized machines, and losing access to some of them can limit how quickly new production lines are built or upgraded. The article does not quantify the precise effect of restrictions on China’s output.

ASML’s chief financial officer, Roger Dassen, said Chinese demand should remain strong because China is building chip capacity. That demand is visible in the 109 per cent quarterly sales increase and China’s 23 per cent share of machine sales. Restrictions could constrain the equipment available for this expansion.

The longer-term outcome remains unsettled. ASML says China still has a very long way to match its technology, while Chinese customers continue buying ASML products. If access narrows, pressure to develop domestic equipment could increase, but the article gives no timetable for that transition.

Chinese companies can try to develop domestic chipmaking equipment, but replacing ASML’s systems is difficult. Lithography machines are highly complex, and matching their performance requires advanced technology, extensive engineering and reliable production. The article does not name a Chinese company that has already matched ASML.

ASML CEO Christophe Fouquet said Chinese customers were not highly motivated to develop domestic alternatives while they could keep accessing ASML products. He also said China still had a “very long way to go” to match ASML’s technology. Continued imports therefore reduce the immediate incentive to replace them.

Tighter export restrictions could change those incentives. Chinese customers might have stronger reasons to invest in local equipment if access becomes less reliable. However, ASML expects Chinese demand to remain strong, suggesting domestic substitution would not happen quickly or easily.

Lithography is a foundational manufacturing step because it creates the patterns that become a chip’s circuits. In standard semiconductor production, a machine projects controlled light through a pattern onto a wafer coated with light-sensitive material. Later processing uses that pattern to form parts of the chip.

The key mechanism is precision. Repeated patterning builds the many layers and structures needed for a working semiconductor. Smaller, more accurate patterns can support more advanced designs. ASML supplies both extreme ultraviolet, or EUV, machines and other lithography systems used in chip production.

That role makes lithography equipment strategically important. ASML expects EUV sales to rise more than 45 per cent in 2026, while customers are planning capacity expansions into 2028 and beyond. Restrictions affect access to a basic tool required for expanding production.