In 2022, \u00a0ASML’s\u00a0 sales in China soared to a remarkable \u00a0\u20ac2.9 billion\u00a0, accounting for \u00a013.8%\u00a0 of its annual revenue. At that time, Taiwan was an even more lucrative market for the company. Fast forward to 2023, and Taiwanese customers spent approximately \u00a0\u20ac8.1 billion\u00a0 on lithography equipment from ASML, while their Chinese counterparts invested around \u00a0\u20ac7.3 billion\u00a0. Interestingly, in 2024, China emerged as ASML’s largest market, with total sales reaching \u00a0\u20ac10.2 billion\u00a0.<\/p>\n
This Dutch company faces constraints when selling its advanced equipment to Chinese clients. While ASML cannot provide the \u00a0latest extreme ultraviolet (EUV)\u00a0 or \u00a0deep ultraviolet (DUV)\u00a0 lithography machines to China at present, it can still supply technology that enables the production of chips using older integration technologies. These semiconductors are primarily utilized in \u00a0automobiles\u00a0, \u00a0home appliances\u00a0, and various \u00a0electronic devices\u00a0, and are typically manufactured on nodes of \u00a028 nm\u00a0 or less advanced technologies.<\/p>\n
Christophe Fouquet, the CEO of ASML, confronts a significant challenge ahead. Similar to his predecessor, Peter Wennink, he must safeguard the interests of his company. However, the tense relations between the \u00a0United States and China\u00a0 complicate matters significantly. The sanctions imposed by the U.S. and the Netherlands restrict ASML from selling its most advanced lithography machines to Chinese customers and even limit its capacity to offer maintenance and after-sales services.<\/p>\n
For the Netherlands, 2024 will be remembered as the year when tensions between ASML and the Dutch government reached new heights. Christophe Fouquet firmly believes that the \u00a0United States will continue to pressure\u00a0 its allies to tighten the sanctions aimed at stifling the development of the Chinese integrated circuit industry. According to the British weekly, The Economist<\/a>, he argues that European politicians and regulators should do more to support ASML in this challenging environment.<\/p>\n In 2024, China solidified its position as ASML’s largest market, achieving total sales of \u20ac10.2 billion.<\/p>\n<\/p><\/div>\n<\/div>\n Regardless, the numbers mentioned earlier offer a clear insight into how ASML is navigating the prohibitions imposed by the U.S. and supported by the Dutch government, which could considerably degrade its business. As noted, in 2024, China emerged as ASML’s largest market with total sales amounting to \u00a0\u20ac10.2 billion\u00a0. This success can be attributed to Chinese integrated circuit manufacturers purchasing a significant volume of lithography equipment suitable for producing mature semiconductors.<\/p>\n This Dutch company has far more advanced chip manufacturing machines, such as the \u00a0EUV and DUV equipment\u00a0 mentioned earlier. Notably, it possesses the highly sophisticated high-NA EUV machines designed to optimize the production of integrated circuits at nodes below \u00a02 nm\u00a0. While ASML is currently barred from delivering these machines to its Chinese clients, it’s crucial to note that the company holds an effective monopoly on both \u00a0EUV and high-NA EUV machines\u00a0. No other company has the resources necessary to produce such complex equipment.<\/p>\n Currently, industry giants like \u00a0TSMC\u00a0, \u00a0Intel\u00a0, \u00a0Samsung\u00a0, \u00a0GlobalFoundries\u00a0, \u00a0Micron Technology\u00a0, and \u00a0SK Hynix\u00a0 are either building new chip manufacturing plants or expanding existing ones. What they all have in common is their reliance on purchasing \u00a0EUV and DUV equipment\u00a0 from ASML. Moreover, TSMC, Intel, and Samsung are expected to acquire a substantial number of high-NA EUV machines over the next three years.<\/p>\n It is evident that even amid the current challenging context, it is difficult to displace ASML. For now, \u00a0their business in China is holding strong\u00a0, and it is likely to continue doing so until Chinese lithography equipment manufacturers develop their own EUV machines. Furthermore, outside of China, ASML faces no competition in its portfolio of EUV machines, highlighting its true strength in the market.<\/p>\n Image | ASML<\/a><\/p>\n