EUV as Geopolitical Chokepoint: US-China Export Controls and the TSMC Dependency
ASML's EUV lithography monopoly has become arguably the single most consequential chokepoint in the US-China technology decoupling. Dutch export licenses, coordinated with US policy, have blocked EUV sales to Chinese customers since 2019, while essentially all leading-edge EUV capacity remains concentrated in Taiwan and South Korea.
ASML's monopoly on extreme ultraviolet lithography machines is not merely commercial — it sits at the center of the most consequential industrial policy contest of the 2020s. Since 2019, with escalations in 2022 and 2024, the Netherlands government has blocked ASML from selling EUV machines to Chinese customers, with licensing decisions coordinated with United States export-control policy. ASML cannot legally ship an EUV system without a Dutch export license, making the Hague a de facto gatekeeper on China's access to leading-edge semiconductors. The dependency cuts the other way too. Essentially all leading-edge EUV capacity is installed in Taiwan (TSMC) and South Korea (Samsung). A natural disaster, military conflict, or extended outage at either site would cost the global semiconductor industry an entire generation of capability, with no fast recovery path because the machines take years to install and qualify. This concentration is the practical reason chip supply chain risk is a national security concern in Washington, Brussels, and Beijing simultaneously. Chinese chipmaker SMIC demonstrated a workaround in 2023, reportedly producing 7nm-class chips using multi-patterned deep ultraviolet lithography (DUV) — the older, less restricted technology that ASML, Nikon, and Canon all still ship. The result proved the chokepoint is not absolute: with enough effort, you can approximate EUV-class features using DUV multi-patterning. But yield is significantly worse and per-wafer cost much higher, meaning the strategic restriction imposes a real performance and economics penalty even when bypassed. The CHIPS Act, signed in the United States in 2022, committed 52 billion dollars in subsidies partly aimed at rebuilding domestic leading-edge fabrication capacity. As of 2026, meaningful EUV-based US output remains years away. The chokepoint structure — one Dutch company, two East Asian fab operators, one US-aligned export regime — defines the strategic terrain of modern compute. The parallel to The Strait of Hormuz: The World's Most Critical Oil Chokepoint is direct: a small number of physical sites that the global economy cannot route around.