ASML Photo: VCG

ASML Chief Executive Christophe Fouquet's latest warning over chipmaking equipment export ban to China has laid bare a growing dilemma for Western technology firms: The tighter the restrictions on exports to China, the greater the risk that such curbs will hurt their own market interests, strain global supply chains and accelerate China's drive for self-reliance, a Chinese analyst said. 

In a rare interview on the sidelines of a technology event in Antwerp, Belgium, Fouquet said the booming global semiconductor market will be "tense" with tight supply for the foreseeable future, with demand from AI, satellites and robots outpacing what the industry can produce, Reuters reported on Wednesday.

Fouquet called for "more consistent rules" around exports of chipmaking equipment to China. He said the lower-tech DUV tools ASML sells to China are based on technology introduced in 2015 - "eight generations of chip technology ago."

The head of the chipmaking machine giant warned that further restrictions would only push China to develop its own competing tools faster. "If I put you in a desert and tell you you're not going to have access to food anymore - how long does it take you to make your own garden?" he told Reuters. "It's a matter of survival." 

ASML, Europe's most valuable firm, dominates the market for systems used to print the tiny circuitry on high-tech chips. Its most advanced tools are essential for producing logic chips used in AI, as well as the memory chips needed alongside them.

Fouquet's latest remarks show that US extraterritorial pressure and Washington-led curbs on chip equipment exports to China have deepened the dilemma facing Western equipment makers, with China's rapid progress in independent semiconductor R&D creating growing "market pressure," Liu Gang, chief economist at the Chinese Institute of New Generation Artificial Intelligence Development Strategies, told the Global Times on Thursday. 

Despite long-term equipment restrictions and technology blockades by some Western countries, China has continued to advance in immersion lithography and other key chip technologies, Liu said. "For ASML, which has long dominated lithography equipment, China's progress is a commercial reality it must take seriously."

In April, US lawmakers proposed a law forcing allies to abide by US restrictions, blocking ASML's sales and servicing of its DUV immersion lithography tools to customers in China. The news triggered a decline in ASML shares, Reuters reported at the time.

The proposed US legislation also drew objections from the Dutch government. Reuters reported on May 14 that the Netherlands objected to the bill in written answers to questions from parliament.

Dutch Trade Minister Sjoerd Sjoerdsma said the government's main objection was the bill's "extraterritorial" nature, referring to provisions that allow Washington to impose restrictions on companies outside the US. He also warned that it could hurt the "market position" of semiconductor companies, including Dutch firms, Reuters reported.

Liu said that key parts of ASML's most advanced systems remain tied to US-controlled technologies, while its overseas sales are heavily constrained by US policy, which makes it difficult for the company to make fully independent commercial decisions.

"The US is asking its allies to bear the commercial cost of Washington's strategic competition with China," Liu said. "For European companies, however, losing access to the Chinese market, or facing repeated uncertainty over China-related business, will directly weaken their global position."

A third of ASML's sales last year were to customers in China, Reuters reported. ASML has forecast that its sales in China will account for 20 percent of its total in 2026. However, an industry analyst, cited by Reuters, estimated that the new US rules could weaken ASML sales by a "single digit" percentage.

JPMorgan analyst Sandeep Deshpande said ASML's sales elsewhere would "increase considerably," but "not offsetting the lost China revenue," while the "biggest impact" would fall on global markets, Reuters reported, citing his note.

Facing unjust suppression and curbs, China has made technological self-reliance and industrial upgrading central to its next-stage development agenda. According to the draft outline of the 15th Five-Year Plan (2026-30), China will take "extraordinary measures" to drive "decisive breakthroughs" across full chains in integrated circuits, machine tools, high-end instruments, basic software, advanced materials and bio-manufacturing.

That push is already reflected in recent progress. Alibaba's chip unit T-Head has unveiled the Zhenwu M890, whose performance is three times that of the previous-generation Zhenwu 810E, per China's STAR Market Daily on Wednesday. Industry observers see the 810E as broadly comparable to Nvidia's H20, a cut-down AI chip designed for export to China.

Progress is also emerging in key materials. Earlier in May, the Shanghai Artificial Intelligence Laboratory said Chinese researchers had developed an AI-powered platform that enables the stable production of high-purity, consistent and efficient krypton fluoride, or KrF, photoresist resin - a core chipmaking material whose quality directly affects chip performance and yield.

In fact, ASML is not alone in warning about the consequences of US export restrictions. Nvidia CEO Jensen Huang has said that the company has "largely" handed China's AI chip market to Huawei as US curbs continue to reshape the global AI semiconductor landscape, CNBC reported on Wednesday.

Huang suggested Nvidia remained eager to return to the market should conditions improve. "The demand in China is quite large. Huawei is very, very strong ... and their local ecosystem of chip companies are doing quite well, because we've evacuated that market," he told CNBC.

Liu said faster technological breakthroughs across China's semiconductor sector reflect the country's firm resolve to advance independent industrial development. "China has a complete industrial system, a huge domestic market and rich application scenarios," he said. "With or without external blockades, this goal will be achieved."