The chip machine company caught between Washington and Beijing

Key points

• ASML, a Dutch company that makes the machines used to manufacture computer chips, earned 2.9 billion euros ($3.3 billion) from China in the first half of 2026, about 16% of its total revenue.
• China is forecast to account for roughly 20% of ASML's full-year 2026 revenue, according to ASML's own chief financial officer.
• US lawmakers introduced the MATCH Act in April 2026, a bill that could ban Chinese companies from buying even ASML's less advanced chip-making machines.
• ASML shares fell when the MATCH Act was introduced, reflecting how much a China ban could hurt the company's bottom line.
• Chinese semiconductor equipment spending is expected to grow around 10% per year for the next two years, according to analysts at Bernstein.

There is one company that makes the machine every advanced chip on Earth depends on. It is not American. It is not Chinese. It is Dutch, it is called ASML, and right now it is squeezed between two superpowers that both want to win the race for artificial intelligence.

ASML builds lithography machines, which are essentially giant, extremely precise printers that stamp circuit patterns onto silicon wafers to create computer chips. Its most advanced version, called EUV (extreme ultraviolet lithography), is so technically complex that no other company on the planet makes one. Without these machines, you cannot build a cutting-edge AI chip.

Export rules already ban ASML from selling those top-tier EUV machines to China. But it can still sell older, less powerful versions called DUV (deep ultraviolet) machines, and China buys a lot of them. CNBC first reported that Chinese sales hit 2.9 billion euros in just the first six months of 2026. China was ASML's third-biggest market in that period, ahead of the United States.

ASML's CFO Roger Dassen expects China to make up around 20% of net sales for the full year of 2026, meaning the second half is likely to be even busier than the first. The demand is real. Analysts at Bernstein put Chinese semiconductor equipment spending growth at roughly 10% a year for the next 24 months.

Could the door close on China entirely?

Yes, and that is the risk now sitting in ASML's share price. US lawmakers introduced the MATCH Act in April 2026. If it passes, it would block Chinese companies from buying even the older DUV machines ASML currently ships. Shares dropped when the bill was tabled.

The bill targets a simple idea: deny China the tools it needs to build chips at any meaningful scale, not just the most advanced ones. Analyst Sandeep Rao noted the act "squarely aims at denying most chip-making technology to China" and could significantly hit ASML's order book.

For ASML, the maths is uncomfortable. Losing China would mean replacing roughly one-fifth of its revenue. That is not impossible given surging demand elsewhere, but it is not painless either.

For ordinary people, the downstream effects are real. Chips go into everything: phones, cars, medical equipment, household appliances. A prolonged technology war that disrupts chip production anywhere in the supply chain tends to push prices up and slow down new products reaching shelves.

ASML raised its financial guidance for the second time this year in July 2026, a sign that overall demand from AI chip makers is strong. But the China question is not resolved, and Washington shows no sign of pulling back.