ASML and China: Chip Export Tensions and the European Supply Chain

Timeline of a quiet dispute

On June 19, 2026, TechCrunch reported a significant diplomatic tension. The US government suggested that one of ASML's most advanced machines, probably an EUV (Extreme Ultraviolet Lithography) system, is located in China. ASML responded with a flat denial. The company stated that it has not violated any export license.

Still, the accusation alone has sent ripples far and wide. Financial markets reacted with volatility. The political debate in Europe and the United States has also flared up around an already hot topic: how far can Western control over dual-use technologies go?

Before analyzing the operational implications, it helps to set the scene. ASML is the only company in the world able to build EUV machines. These machines are essential for manufacturing chips below 7 nanometers. As a result, whoever controls ASML effectively controls the bottleneck of the entire global semiconductor industry.

Winners and losers in the semiconductor game

In this story, risk is distributed asymmetrically. Let's look at the key players.

ASML is in a paradoxical position. It is a private Dutch company, but it operates in a sector that governments treat as strategic infrastructure. Every commercial move it makes is subject to multilateral scrutiny. Even so, its technological monopoly gives it extraordinary bargaining power.

The United States has gradually expanded controls on exports of semiconductor technology to China. Back in 2023, it pressed the Netherlands to revoke export licenses for EUV systems. In 2025, these restrictions tightened further. So the latest move looks consistent with a long-term strategy of technological containment.

China, for its part, has invested billions in building a domestic semiconductor supply chain. Still, the technology gap with the global leaders remains wide. Access to technologies like ASML's, even indirect, would therefore be a significant leap forward.

Europe, finally, is caught in the middle. European companies depend on chips made with ASML technology. As a result, every geopolitical escalation turns into concrete risks for business continuity.

The business logic nobody says out loud

One point stands out clearly from the analysis. ASML has no rational incentive to put its export license at risk. Losing that license would mean being unable to sell its systems to its most important customers: TSMC, Samsung, Intel. That would be economic damage in the tens of billions of euros.

Indeed, as McKinsey's semiconductor insights point out, companies operating in dual-use sectors build extremely sophisticated compliance systems, precisely because the cost of a violation is existential. So the idea of an intentional violation by ASML looks unlikely from a business-logic standpoint.

That said, this doesn't rule out more complex scenarios. For example, a violation could have occurred through third-party intermediaries, without ASML's direct involvement. Or it could be a customs classification error. Either way, the ongoing investigation will clarify the details. What matters strategically is which way the geopolitical wind is blowing.

SHM Studio's take: why Italian SMEs should pay attention

At first glance, a diplomatic dispute between Washington and a Dutch company seems far removed from the day-to-day concerns of an Italian SME. In reality, the implications are closer than they look.

At SHM Studio, we work every day with companies that rely on digital infrastructure. This infrastructure, from cloud servers to SaaS tools, from hardware devices to production plants, is all built on chips. So any shock to the semiconductor supply chain quickly spreads across the entire digital value chain.

Geopolitical tensions also tend to speed up two parallel trends. On one hand, rising prices for electronic components. On the other, longer procurement times. As a result, companies that haven't diversified their technology suppliers face significant operational risks.

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The regulatory landscape: export controls are changing fast

The international regulatory framework for exports of critical technologies has changed profoundly in recent years. The US Department of Commerce's Bureau of Industry and Security (BIS) has gradually expanded the list of controlled technologies.

In particular, advanced chips and the machines used to make them are now classified as dual-use technologies. This means they can have both civilian and military applications. As a result, exporting them requires specific licenses and in-depth end-user checks.

Likewise, the European Union has strengthened its control mechanisms. The EU Dual-Use Regulation, updated in 2021 and further implemented in 2025, imposes stricter due diligence obligations. European companies in tech sectors therefore need to closely monitor regulatory changes.

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What's next: reshoring and supply chain diversification

The ASML affair accelerates a trend already under way. Governments and companies are investing heavily in reshoring semiconductor production. Harvard Business Review analyzed how this transition requires investments in the hundreds of billions of dollars and timelines of at least a decade.

In Europe, the European Chips Act aims to raise the continent's share of global production to 20% by 2030. Still, experts are skeptical that the goal is feasible on schedule. Even so, the strategic direction is clear: reduce dependence on Asian suppliers.

For Italian SMEs, this scenario opens up real opportunities. For example, companies in electronic components or industrial automation could benefit from new flows of public and private investment. Likewise, those providing digital services to these supply chains could find themselves in a favorable position.

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Next moves: what to monitor in the coming months

The ASML-US dispute is still unresolved. In the coming months, it will be worth keeping an eye on a few key indicators.

• The outcome of the government investigation: if the allegation is confirmed, the impact on the semiconductor market would be immediate and significant.
• The reactions of European governments: in particular, the Dutch response will show how well Europe's strategic autonomy holds up.
• ASML's share performance: financial markets often act as an early thermometer of industry expectations.
• Chip prices on the spot market: any rise in tension would quickly be reflected in procurement costs.

So if you operate in tech-dependent sectors, you would do well to set up a continuous monitoring system. Finally, if you would like to explore how to integrate this kind of analysis into your digital strategy, the SHM Studio team is available for a consultation. You can also explore our blog for more insights on technology, markets and digital strategies for Italian SMEs.