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ASML is performing a balancing act.
On the one hand, sales from China still make up a sizable chunk of its revenue.
While down compared to previous years, China will contribute around 20% of ASML’s revenue across the whole of 2026, CFO Roger Dassen said in a transcript of a video interview.
On the other hand, political headwinds in the U.S. are pushing strict export controls on sales of chipmaking hardware to Beijing, as the battle for AI supremacy between the two countries intensifies.
It leaves Europe’s most valuable company in a delicate position of looking to simultaneously keep Western governments and shareholders happy. Demand for ASML machines is growing in China — but so too are calls in Washington to tighten export restrictions further.
“China remains to be an important market for ASML, while the Dutch supplier looks to walk a geopolitical tightrope between Beijing and Washington,” Neil Shah, VP research at Counterpoint, told CNBC.
The geopolitics of AI
Stepping back for a moment, on Wednesday ASML raised its guidance for the second time this year and reported stronger-than-expected quarterly results as its customers continue to ramp up production of AI chips.
Stock stayed largely flat despite the blowout earnings (as is proving a bit of a theme this year among AI firms).
But for me, the really interesting story is the one at the intersection of AI and geopolitics. In this case, it’s ASML’s activity in China.
As it stands, the Dutch giant doesn’t ship its most advanced chipmaking equipment — which includes extreme ultraviolet lithography (EUV) machines — to the country, after years of export restrictions. Some less advanced deep ultraviolet (DUV) lithography machines are bought and sold in China, however — and there’s big numbers involved.
Sales in China hit 2.9 billion euros ($3.3 billion) in the first six months of 2026, roughly 16% of total revenue.
Dassen’s comments that Chinese sales will make up around 20% of net sales across the whole of 2026, point to revenue from the country increasing in the second half of 2026 compared to the first.
“The Chinese market is moving in sync with the overall behavior that we see globally,” Dassen said. “If you really want to pinpoint where is that extra demand in China? It is primarily in the Logic business and then primarily catering to domestic led demand.”
Chinese semiconductor equipment spend is expected to grow around 10% every year for the next 24 months, David Dai, senior analyst at Bernstein, told CNBC.
Export controls
But as demand ticks up, some U.S. lawmakers want to curb China access to even less advanced ASML machines.
Earlier this year, lawmakers in the country petitioned Secretary of State Marco Rubio and Secretary of Commerce Howard Lutnick to impose stronger controls on chipmaking tools.
And April saw the MATCH (Multilateral Alignment of Technology Controls on Hardware) Act tabled.
“The proposed US MATCH Act squarely aims at denying most chip-making technology to China, which could significantly impact ASML’s orderbook in the years to come,” Sandeep Rao, researcher at Leverage Shares, told CNBC.
Whether that happens — and how it would impact ASML’s bottom line — remains to be seen.
With a monopoly over a type of machine essential for manufacturing the most advanced chips, the company certainly has seen huge demand for its products globally amid the rising AI boom.
But, in the first half of 2026, China was the third biggest region in terms of revenue for ASML, behind only South Korea and Taiwan. The chip giant made nearly 1 billion euros more from the country than it did in the U.S.
Latest updates
Chinese startup Moonshot AI has unveiled a new model it says closes the gap with leading U.S. offerings and surpasses OpenAI and Anthropic’s most capable systems on some benchmarks.
Nvidia-backed cloud startup Fireworks hit a $17.5 billion valuation in a $1.5 billion raise.
Shares of Chinese tech giants Alibaba and Baidu rose Thursday on their partnership with Apple for deploying their AI tools.
Anthropic is lining up meetings with investors ahead of a potential initial public offering later this year, a person with knowledge of the plans told CNBC.
Google’s AI boss called for the U.S. to spearhead a standards body that will oversee new AI models and assess national security risks including cybersecurity and biological threats.
One more thing
CNBC’s Arjun Kharpal on The Tech Download podcast with Clay Bavor, co-founder of Sierra
AI agents are one of the biggest buzzwords in technology right now. But what do they actually do inside a business?
Clay Bavor, co-founder of Sierra, joined Arjun Kharpal on The Tech Download podcast to discuss how companies are already using AI agents for customer service, sales and support.
Bavor said agents are “a new type of software” that can reason, make decisions, use tools and take action — without every step being programmed in advance.
Sierra works with companies including Rocket Mortgage and Cigna to deploy customer-facing AI agents that can handle conversations, gather information, resolve issues and escalate to humans when needed.
The conversation also looks at one of the biggest questions facing enterprise AI: ROI. After a first wave of experimentation, companies are now asking whether AI is actually creating measurable value.
Bavor explains why Sierra is pushing outcomes-based pricing, where customers pay when an AI agent completes a task successfully.
Lots more to unpack in the podcast. Give it a listen
— Connor McLaughlin, tech producer
