ASML CEO Predicts Growth in 2026 Despite U.S.-China Tensions

ASML, the Dutch company that dominates the global market for advanced semiconductor manufacturing equipment, is projecting a return to growth in 2026, despite ongoing geopolitical tensions and export restrictions. CEO Christophe Fouquet made this announcement during a Bloomberg technology conference in London, addressing the company’s outlook amid a volatile global semiconductor landscape.

ASML’s Pivotal Role in the Semiconductor Industry

ASML is a critical player in the global semiconductor supply chain. Its advanced extreme ultraviolet (EUV) lithography machines are essential for producing the most cutting-edge computer chips, used in everything from smartphones to artificial intelligence (AI) systems. ASML’s biggest clients include Taiwan Semiconductor Manufacturing Company (TSMC), which supplies chips to tech giants like Nvidia.

Given ASML’s role, its performance is often seen as a bellwether for the wider semiconductor industry. However, 2025 is expected to see slower growth due to a decline in demand across various electronics markets. The slowdown will affect most segments outside of AI-related chips, which remain a growth area. Despite this, Fouquet expressed optimism about the company’s long-term trajectory, predicting that 2026 would see renewed growth for ASML, although precise forecasts for the year remain uncertain.

The U.S.-China Tech Conflict and ASML’s Export Restrictions

One of the biggest challenges facing ASML is the ongoing geopolitical tension between the U.S. and China. For several years, the U.S. government has been placing restrictions on the export of advanced technology to China, citing national security concerns. ASML, which sells advanced chipmaking tools to manufacturers in China, has been caught in the middle of this tug-of-war.

The U.S. has pushed for broader restrictions on the sale of semiconductor manufacturing equipment to Chinese firms, particularly those that could be used for military applications or to develop China’s own advanced chip technology. ASML’s EUV machines, which are essential for producing the most advanced 5nm and 3nm chips, have been specifically targeted in these restrictions. While ASML has been barred from selling these advanced tools to Chinese companies, it has continued to sell older, less advanced equipment, particularly deep ultraviolet (DUV) lithography machines.

Fouquet acknowledged that the pressure on ASML’s exports to China would likely persist, regardless of the outcome of the next U.S. presidential election. “If you look at the geopolitical landscape, I think it’s clear that the United States will continue to apply pressure on their side for more restrictions,” Fouquet said.

Impact on ASML’s China Sales

China has historically been a major market for ASML. In recent quarters, sales to China accounted for nearly 50% of ASML’s revenue from older, unrestricted equipment. However, Fouquet noted that ASML expects China’s share of its total sales to drop to around 20% in the future as the company navigates increasing restrictions and focuses more on other markets.

These geopolitical tensions have raised broader questions within the semiconductor industry about the long-term impact of such restrictions. Fouquet highlighted ongoing debates within Europe and the Netherlands about whether these export controls are primarily about national security or economic competition. He also pointed to increasing scrutiny from U.S. companies, some of which are questioning whether these restrictions are ultimately beneficial or harmful to their business interests.

The Future of Semiconductor Trade Policy

The U.S.-China technology conflict has not only affected ASML but has also shaped the global semiconductor industry. With chips becoming increasingly central to economic and military power, governments are treating semiconductor supply chains as matters of national security. The U.S. has ramped up efforts to curtail China’s access to the most advanced semiconductor technologies, while China has invested heavily in developing its own domestic chipmaking capabilities.

Fouquet emphasized that the ongoing debate about export controls is complex, with questions about both national security and economic competitiveness at its core. “One of the debates is, is it really about national security?” Fouquet noted. He also mentioned that many U.S. companies are now questioning whether these restrictions ultimately help or hurt their business.