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ASML performs a balancing act.
On the one hand, sales from China still account for a significant portion of revenue.
Although China is down compared to previous years, it will contribute about 20% of ASML’s net sales for all of 2026, CFO Roger Dassen said in the transcript of a video interview.
On the other hand, political headwinds in the US are pushing for strict export controls on the sale of chip-making hardware to Beijing as the battle for AI supremacy between the two countries intensifies.
This puts Europe’s most valuable company in the delicate position of having to simultaneously try to hold on to Western governments And Shareholders satisfied. Demand for ASML machines is growing in China – but there are also calls in Washington to further tighten export restrictions.
“China remains an important market for ASML as the Dutch operator walks a geopolitical tightrope between Beijing and Washington,” Neil Shah, VP Research at Counterpoint, told CNBC.
The headquarters of ASML Holding NV in Veldhoven, Netherlands, on November 14, 2025.
Bloomberg | Bloomberg | Getty Images
Table of Contents
The geopolitics of AI
Stepping back for a moment, ASML on Wednesday raised its forecast for the second time this year and reported stronger-than-expected quarterly results as its customers continue to ramp up production of AI chips.
Stocks were largely flat despite the blowout earnings (which is proving to be something of a theme for AI companies this year).
But for me the really interesting story is the one at the intersection of AI and geopolitics. In this case, it concerns ASML’s activities in China.
Currently, the Dutch giant is not shipping its state-of-the-art chip manufacturing equipment – which includes machines for extreme ultraviolet lithography (EUV) – to the country after years of export restrictions. However, some less advanced deep ultraviolet (DUV) lithography machines are being bought and sold in China – and in large numbers.
Sales in China reached 2.9 billion euros ($3.3 billion) in the first six months of 2026, accounting for about 16% of total sales.
Dassen’s comments that Chinese sales will account for about 20% of net sales throughout 2026 suggest that revenue from the country is increasing in the second half of 2026 compared to the first.
“The Chinese market is moving in line with the general behavior we are seeing globally,” Dassen said. “If you really want to know exactly where is this additional demand in China? It’s primarily in the logic business and then primarily serves domestic demand.”
Chinese spending on semiconductor equipment is expected to rise about 10% each year over the next 24 months, David Dai, senior analyst at Bernstein, told CNBC.
Export controls
But as demand increases, some U.S. lawmakers want to limit China’s access to even less advanced ASML machines.
Earlier this year, the country’s lawmakers asked Secretary of State Marco Rubio and Commerce Secretary Howard Lutnick to impose stricter controls on chip-making tools.
And in April, the Multilateral Alignment of Technology Controls on Hardware (MATCH) Act was introduced.
“The proposed US MATCH Act is clearly aimed at depriving China of most chip manufacturing technologies, which could have a significant impact on ASML’s order book in the coming years,” Sandeep Rao, researcher at Leverage Shares, told CNBC.
ASML shares fell as the bill was introduced. If passed, the law could even ban Chinese companies from purchasing ASML’s DUV lithography machines, which can produce less advanced semiconductors.
Whether that happens – and how it would affect ASML’s bottom line – remains to be seen.
Since the company has a monopoly over a type of machine that is essential for producing the most advanced chips, the company is certainly seeing huge demand for its products worldwide as the AI boom increases.
But in the first half of 2026, China was the third-largest region for ASML in terms of revenue, behind only South Korea and Taiwan. The chip giant earned almost a billion euros more in the country than in the USA
Latest updates
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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 in a company?
Sierra co-founder Clay Bavor 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 kind of software” that can reason, make decisions, use tools and take actions — without having to program each step in advance.
Sierra is working with companies like Rocket Mortgage and Cigna to deploy customer-facing AI agents that can conduct conversations, gather information, resolve problems and escalate to humans when needed.
The conversation also addresses one of the biggest questions in enterprise AI: ROI. After an initial wave of experimentation, companies are now asking themselves whether AI actually creates measurable added value.
Bavor explains why Sierra is pushing results-based pricing, where customers pay when an AI agent successfully completes a task.
There’s a lot more to discover in the podcast. Listen to it
— Connor McLaughlin, technology producer
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https://www.cnbc.com/2026/07/17/us-china-ai-feud-asml-tightrope-sales-geopolitics.html
