U.S.-China AI feud sees ASML walk tightrope between sales and geopolitics

U.S.-China AI feud sees ASML walk tightrope between sales and geopolitics

China will contribute around 20% of ASML's net sales across the whole of 2026, the company's CFO said. While that figure is a sizable drop from previous years, political headwinds in the U.S. are pushing for stricter export controls on sales of chipmaking hardware to Beijing.

"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.

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 net sales 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.

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.

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.