Introduction
ASML, the Netherlands-based leader in semiconductor lithography equipment, expects China to account for over 25% of its total sales in 2025.
This forecast comes as a surprise given ongoing U.S. export restrictions and looming tariff threats under former President Donald Trump’s proposed trade agenda.
While demand for chipmaking tools in China continues to rise, ASML remains skeptical of claims that the country is close to producing its own extreme ultraviolet (EUV) lithography machines.
Key Highlights
ASML forecasts China to contribute more than 25% of its 2025 revenue.
Older DUV machines are driving sales, as EUV exports remain restricted.
ASML CEO says China’s EUV development is still many years away.
Chinese chipmakers are accelerating domestic capacity amid tech restrictions.
Despite tariff fears, ASML’s Q1 2025 China sales held steady at 27%.
Strong Demand from China in 2025
ASML reported that China made up 27% of its total system sales in the first quarter of 2025. This figure is unchanged from Q4 2024 and higher than the company’s earlier projections.
Last October, ASML warned that China’s share could fall to 20% due to tighter U.S. export controls. However, strong local demand has defied expectations.
CFO Roger Dassen said in an earnings call that China’s appetite for mainstream chips—used in smartphones, vehicles, and industrial equipment—has remained robust. He noted that demand is slightly stronger than anticipated three to six months ago.
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Why China Still Buys ASML Machines
U.S. restrictions prevent ASML from shipping its most advanced EUV systems to China. Yet Chinese chipmakers continue to buy ASML’s deep ultraviolet (DUV) machines, which are still crucial for mature node production.
These older DUV systems, although less advanced, are vital for making chips in the 28nm to 65nm range. These chips are still in high demand for consumer electronics, EVs, and IoT devices.
Analysts cited by Reuters and Seeking Alpha believe China is stockpiling DUV tools to future-proof production amid fears of escalating U.S.-China tech tensions.
techovedas.com/asml-and-imec-invest-380m-in-next-gen-chip-lab
The EUV Race: Still a Long Road for China
Despite growing media speculation, ASML’s top executive remains doubtful that China is close to building its own EUV machines. Reports from outlets like TechPowerUp claim a domestic EUV system is under testing at Huawei’s Dongguan facility. Trial production is expected later in 2025, with mass rollout in 2026.
However, ASML CEO Christophe Fouquet dismissed these claims. He said the circulating images appear more like research experiments than production-ready tools.
“We expect to continue seeing announcements here and there, but building a functioning EUV machine will still take many, many years.”ASML CEO Christophe Fouquet
techovedas.com/what-are-3-major-challenges-in-euv-lithography
Why EUV Is So Difficult
Extreme ultraviolet lithography is essential for producing chips at the 5nm and 3nm level. Only ASML currently supplies EUV tools globally. These machines involve ultra-complex technologies, including EUV light sources, multilayer mirrors, and nanoscale precision engineering.
Even with massive investment and engineering talent, replicating this ecosystem is an enormous challenge. According to ASML, building a working EUV system requires over 100,000 parts and coordination with hundreds of suppliers—many based in Europe and the U.S.
Tariffs Loom, But China Demand Holds
ASML’s strong Q1 results come amid renewed trade tension. Former U.S. President Donald Trump, now a candidate for the 2024 election, has proposed 60% tariffs on Chinese goods if reelected. Such policies could impact global semiconductor trade.
Still, ASML seems to be weathering the storm. China’s continued investment in local semiconductor production, paired with steady demand for legacy node chips, suggests a solid market for ASML’s DUV tools—at least in the short term.
techovedas.com/asml-doubles-down-on-china-with-new-beijing-repair-center-despite-u-s-export-curbs
Conclusion
ASML’s outlook for 2025 reflects growing Chinese demand and resilient sales despite external pressure. While China continues to invest in local chipmaking and hints at EUV development, ASML’s leadership remains confident that real competition in the EUV space is years away. For now, China depends on ASML for critical semiconductor tools—especially those just below the cutting edge.
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