The US Commerce Secretary's Shocking Claim

US Commerce Secretary Howard Lutnick has revealed that he's concerned one of ASML's extreme ultraviolet lithography machines may have ended up in China, breaching export controls and sparking a major controversy in the global chip industry.

According to Bloomberg, Lutnick has met with senior ASML executives, expressing his concerns that the Dutch chipmaker may have shipped EUV-related components and transport equipment to China, despite being barred from doing so since the Trump administration.

The allegations are serious, with senior administration officials claiming to have evidence that ASML shipped EUV-related components to China. However, the company denies any wrongdoing, stating that no EUV machine exists in China and has never existed there.

The Commerce Department hasn't responded to questions about whether it has evidence of an actual EUV system on Chinese soil.

The Importance of ASML in the Global Chip Industry

ASML is a Dutch company that's crucial to the global AI buildout, producing the only machines capable of EUV lithography, the process of printing microscopic circuit patterns on the most advanced chips.

Every cutting-edge processor made by TSMC, the foundry behind Nvidia's and Apple's chips, depends on ASML tools that took the company two decades and untold billions to develop.

ASML CEO Christophe Fouquet's Defense

Fouquet has maintained that ASML tracks every machine it has ever shipped, ensuring they're either in active use with monitored customers or have been dismantled and returned to the company.

The company has an internal firewall that separates employees with access to EUV technology from those without, with China-based staff sitting on the wrong side of the wall.

Fouquet has argued that you can't reverse-engineer a machine you've never had, and nobody in China has had an EUV machine.

xLight and the Future of Lithography

The Commerce Department has invested $150 million in xLight, a startup developing a next-generation light-source technology that's been written about as a long-term challenge to the core of ASML's EUV monopoly.

ASML CEO Christophe Fouquet has expressed skepticism about xLight's ambition to partner with the company, rather than compete directly.

A Bipartisan Bill with Far-Reaching Implications

A bipartisan bill moving through Congress would go beyond EUV, calling for a ban on all of ASML's deep ultraviolet shipments to China, which account for roughly a fifth of the company's expected 2026 revenue.

The bill has cleared a key committee and is awaiting a formal position from the Trump administration.

Conclusion

*The allegations against ASML are serious, and the implications for the global chip industry are far-reaching. While the company has denied any wrongdoing, the US government's investigation will likely continue, with significant consequences for the industry and national security.