ASML Photo: VCG

A pointed warning from ASML's chief executive has cast fresh light on a growing question behind Washington's China-focused chip curbs: as the US extends restrictions beyond its borders, who is ultimately bearing the cost?

ASML CEO Christophe Fouquet's latest remarks on the ban on exporting chipmaking equipment to China highlight a deepening dilemma for Western tech firms. The tighter the curbs, analysts say, the greater the risk of harming their own market interests, disrupting global supply chains and accelerating China's push for technological self-reliance.

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.

He also said there would likely be "sporadic bottlenecks throughout the supply chain" of a chip market that could reach $1.5 trillion by 2030, according to Reuters.

In the same interview, 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."

Restrictions fuel market backlash

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 Netherlands has previously aligned with the US on restrictions barring ASML from selling its most advanced equipment to Chinese customers. But the latest US proposal went further by seeking to force its allies to follow Washington's export controls against China, according to Reuters.

The proposed law 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 pointed to the extent of US influence over ASML, saying 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.

Self-reliance drive accelerates

Facing unjust suppression and curbs, China has made technological self-reliance and industrial upgrading central to its next-stage development agenda. According to the outline of the 15th Five-Year Plan (2026-30), China will take measures to achieve decisive breakthroughs in key core technologies in major fields such as integrated circuits, industrial machine tools, high-end instruments, basic software, advanced materials, and biomanufacturing.

That push is already reflected in lithography-related materials, a key part of the chipmaking chain. 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.

The momentum is also visible in chip products. 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.

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.

If ASML's warning points to the risk of equipment-side substitution, Nvidia's experience shows the market cost already taking shape, as US restrictions have pushed Chinese demand toward domestic players, analysts said.

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."

As Fouquet's own warning suggested, when access is restricted, developing alternatives becomes "a matter of survival."