ASML Sells 109% More Chip Equipment to China Despite US Pressure for Restrictions

The quarter when China grew again

ASML, the Dutch company that dominates the market for chip-manufacturing lithography machines, released its third-quarter 2026 results this Wednesday (October 14) with a striking figure: equipment sales to China rose 109% compared to the previous quarter, according to SCMP.

As a result, China accounted for 23% of ASML's machine sales in the period, up from 14% in the second quarter. The company projects the country will close out 2026 representing about 20% of total annual revenue.

The jump draws attention because it comes at the exact moment Washington is pressuring the Dutch government to further tighten restrictions on sales of less-advanced lithography equipment to China.

What ASML can (and can't) sell to China

It's worth separating two worlds within ASML's portfolio. Extreme ultraviolet (EUV) lithography machines, used to manufacture the market's most advanced chips, have been banned from export to China since 2019, due to direct pressure from the US.

What China can still buy freely are deep ultraviolet (DUV) lithography machines, an older technology used to manufacture mature-process chips: semiconductors for cars, consumer electronics, industrial equipment, and IoT devices. It's precisely this category, classified as "less advanced," that the US wants to restrict further.

The practical result: China isn't buying capacity to rival TSMC or Samsung at the frontier of AI chips, but it is heavily reinforcing its self-sufficiency in general-purpose chips, the ones that power much of the embedded electronics that arrive in Brazil every day.

The Match Act and the pressure on the Netherlands

The political machinery behind this dispute has a name: the Match Act, a US bill that seeks to compel American allies, such as the Netherlands, to replicate the trade restrictions the White House has imposed on China, including in trade of less-advanced lithography equipment (more context on SCMP).

In an interview with Bloomberg last month, Dutch Prime Minister Rob Jetten said he was confident the Netherlands would reach an agreement with the United States on the matter. Sources consulted by SCMP say Jetten has a trip to China scheduled for next spring, a sign that The Hague wants to keep both ends of the trade relationship open.

ASML is caught in the middle of this tug-of-war: it's the only company in the world capable of manufacturing EUV machines, which makes it both a strategic asset for the US and a central piece of Dutch industrial policy.

Growth comes from far beyond China

Even though China grabs the headlines, the engine behind ASML's year is something else: demand for EUV machines to manufacture leading-edge chips, the same ones used in AI accelerators and high-performance GPUs.

The company raised the floor of its 2026 revenue guidance to €44 billion (about US$49.25 billion) and kept the expected gross margin at around 56%, at the top of the previous range. For the fourth quarter, the forecast is revenue between €14.2 billion and €14.2 and €15.2 billion.

The year's numbers, according to CFO Roger Dassen:

• Total 2026 revenue is expected to grow 36% year over year;
• EUV machine sales are expected to rise more than 45% for the year;
• Revenue from the non-EUV business is expected to grow 20%;
• Installed-base revenue (services and maintenance) is expected to rise 50%.

Sales momentum was really very, very strongly building up.

Roger Dassen, ASML CFO

Capacity that can't keep up with demand through 2030

The most revealing figure for those following the semiconductor supply chain isn't from 2026: it's ASML's own projection that demand already exceeds its announced expansion plans. The company had planned to increase production capacity for low numerical aperture (low-NA) EUV systems by 30% over the next two years, but admits that won't be enough.

We have to do more and we are looking basically at ways, especially in 2028 and beyond, to further extend our capacity.

Christophe Fouquet, ASML CEO

Fouquet detailed that conversations with customers are already targeting longer timeframes than usual for the industry: capacity orders for 2028 are well advanced, and there's already concrete interest in booking orders for 2029 and even 2030, according to him. The market reacted: ASML shares rose more than 1% on the Amsterdam stock exchange after the announcement.

What this changes for those building software in Brazil

The chip production chain is the most distant (and most decisive) bottleneck in the infrastructure any developer uses today: cloud, GPUs for training models, IoT boards, industrial controllers. ASML doesn't sell chips, it sells the machine that manufactures chips, which is why its numbers work as a thermometer two years ahead of hardware availability.

The good news, for those who depend on GPUs and AI accelerators, is in the EUV numbers: growth of more than 45% in sales for the year and capacity discussions already targeting 2030 indicate that investment in advanced manufacturing capacity (the kind that produces chips like the ones used in Nvidia accelerators manufactured by TSMC) continues to expand, not contract, despite all the geopolitical tension.

The growth in sales of less-advanced equipment to China, meanwhile, has another practical effect: more manufacturing capacity for mature-process chips theoretically means more global supply of semiconductors for automotive, consumer electronics, and embedded devices, categories where Brazil imports practically everything it uses.

What remains open is precisely the Match Act. If the US manages to convince the Netherlands to further tighten the rules on DUV equipment, the flow that sustained this record quarter could reverse quickly, and any hardware capacity planning that depends on this trade (from data centers to board manufacturers) needs to treat this regulatory risk as a variable, not as background noise.