asml expands into china amid rising us tensions

2025-03-11 asml

beijing, Tuesday, 11 March 2025.
despite escalating us-china trade friction, asml is set to inaugurate a new facility in beijing. the center will focus on reconditioning chip manufacturing systems. this move underscores asml’s dedication to the chinese market, even with us sanctions limiting euv tech exports to china. concurrently, huawei is aggressively developing its own euv capabilities, potentially disrupting asml’s market dominance by 2026. the beijing facility will service only DUV machines. this positions huawei as a significant challenger in the lithography space.

beijing facility details

The new ASML facility in Beijing is designed for the maintenance and refurbishment of chip manufacturing equipment [2]. While ASML positions this as a ‘new’ center, reports suggest it is an upgrade to an existing repair center [4]. An ASML representative clarified that it replaces an older repair center rather than being an additional facility [4]. This upgrade aims to support the circular economy by maintaining, repairing, and upgrading systems [4]. ASML aims for zero waste from operations by 2030 [4].

market position and order book

China was ASML’s largest market in 2024, accounting for 36% of its total sales, surpassing South Korea, the US, and Taiwan [5]. This translated to approximately $10.9 billion in revenue from Chinese companies [4][5]. However, due to increasing trade restrictions, ASML anticipates a decline in China’s sales share to 20% in 2025 [5]. Despite this expected decrease, ASML projects overall revenue between €30 billion and €35 billion for 2025, driven by strong demand in AI-related semiconductor technology [5].

technological leadership and competition

ASML remains the sole global supplier of EUV photolithography machines, crucial for manufacturing advanced chips [1][4]. The Dutch government has blocked the export of EUV technology to China for several years [1]. Huawei is developing laser-induced discharge plasma (LDP) technology as an alternative to ASML’s laser-produced plasma (LPP) technology, potentially achieving EUV radiation at 13.5 nanometers [1][2]. Huawei plans to begin trial production runs by September 2025 and mass manufacturing in 2026 [1][2]. If successful, Huawei could challenge ASML’s monopoly in EUV lithography [2].

us-china trade tensions and asml’s strategy

The opening of the Beijing facility occurs amid escalating trade tensions between the US and China [1]. The Trump administration has further hardened its stance on China, increasing tariffs on imported goods [1]. The US Trade Representative announced a public hearing to investigate China’s targeting of the semiconductor industry [1]. These tensions have led some companies, like IBM, to shutter their Chinese R&D operations [1]. ASML’s continued investment in China, despite these challenges, reflects its strategic commitment to the Chinese market [5].

expert views and potential impacts

Former ASML CEO Peter Wennink had opposed export restrictions against China, suggesting they would only motivate China to develop its own EUV lithography [2]. Current ASML CEO Christophe Fouquet stated that China’s semiconductor industry is 10 to 15 years behind the West [2]. The expansion in China may help ASML maintain its market position in DUV technology, but the potential rise of Huawei as an EUV competitor could impact ASML’s long-term technological leadership [2]. Applied Materials has already experienced revenue losses due to restrictions on services for Chinese customers, highlighting the risks involved [5].

Bronnen

asml china trade sanctions