Why ASML’s CEO Warns China Chip Controls Could Backfire

Christophe Fouquet’s warning is about the possible long-term cost of overly broad export controls: restrictions may limit China’s access to foreign chipmaking equipment today while increasing its incentive to develop domestic alternatives. That is a strategic argument for keeping controls tied to national-security goals—not a claim that China is close to matching ASML’s most advanced technology. 45

Why broader controls could backfire

China is already barred from buying ASML’s extreme ultraviolet (EUV) lithography systems, while it has continued to purchase less-advanced deep ultraviolet (DUV) tools for permitted uses. 1417 Fouquet’s concern, as reported, is that extending restrictions too far could make domestic substitutes more attractive to Chinese companies and policymakers. In that scenario, a measure intended to constrain access could also help build a future competitor. 45

The risk is not an immediate one-for-one replacement. Developing lithography equipment is difficult, and domestic machines would need to prove their performance and production reliability. The concern is that sustained investment and experience could gradually reduce reliance on foreign suppliers in parts of the market.

Why ASML is a critical bottleneck

EUV lithography prints the tiny patterns used in leading-edge semiconductors. ASML is the only commercial supplier of these systems, which makes its equipment a critical link in the production of advanced chips, including chips used for AI. 813

That position does not mean ASML can rapidly supply any increase in demand. The company has reported supply-chain constraints as demand for chipmaking equipment rises. Reuters reported that ASML planned to ship 60 low-NA EUV systems in 2026, with capacity to ship 80 in 2027; separate reporting said its capacity could be booked through the end of 2027. 117 Those figures underline why demand for more advanced chips cannot translate instantly into more lithography capacity.

What China’s reported DUV efforts suggest

Reports describe Chinese efforts to develop advanced DUV lithography machines, with Huawei linked to the broader push. One report said machines were undergoing testing and cited a target of 12 systems by the end of 2026. Those reports point to a possible path for building domestic capability, but targets and prototypes are not proof of reliable, high-volume production.

DUV and EUV are different technologies, and progress on domestic DUV tools does not demonstrate that China can replace ASML’s EUV systems. A Reuters report on a separate Chinese EUV prototype said it was undergoing testing and had not produced working chips. 2

If domestic DUV systems eventually become reliable and competitive at scale, they could put pressure on ASML’s DUV business in China and help local suppliers gain experience. The stronger near-term conclusion is more limited: China is pursuing alternatives, but the available reporting does not show that it has displaced ASML’s EUV lead.

The takeaway

Fouquet’s warning is about incentives and time horizons. Broader controls could encourage China to invest more heavily in homegrown equipment, while ASML’s EUV monopoly and constrained production keep it central to leading-edge chipmaking today. China’s reported DUV work is worth watching as a potential long-term competitive challenge—not as evidence that an EUV replacement is imminent.