ASML Gains 36 Percent Market Share in China Amid Export Curbs

In the fourth quarter of 2025, ASML experienced a significant shift in its market dynamics, with sales in China reaching 36% of the company's total net system sales. Roger Dassen, the Chief Financial Officer of ASML, shared this insight during a call with reporters, indicating that despite the geopolitical tensions and US export restrictions, China has remained ASML's largest market. However, projections suggest that the contribution of the Chinese market may decline to around 20% in the future.

This notable market share was achieved even in the face of stringent export controls that prohibit the sale of certain high-end semiconductor products to China. Experts suggest that the Chinese market's openness to mutually beneficial trade demonstrates a commitment to international cooperation. Furthermore, these export restrictions have prompted China to enhance its domestic semiconductor manufacturing capabilities, fostering self-reliance and enabling the pursuit of balanced international partnerships.

Despite the challenges posed by US-led sanctions, ASML's ability to engage with the Chinese market is restricted primarily to technology that falls short of the industry's cutting edge. According to reports, the company has never been able to sell its extreme ultraviolet (EUV) lithography machines to China and is also barred from selling its most advanced deep ultraviolet (DUV) tools, meaning that the devices supplied are typically several generations behind the latest offerings.

As advanced lithography machines are often viewed as the last stronghold of Western technological dominance, the competition surrounding semiconductor technology remains intense. In September 2024, China's Ministry of Industry and Information Technology made strides toward self-sufficiency by releasing a catalogue aimed at promoting the use of domestically produced DUV lithography machines, which outlines technical specifications and goals for further developments in this sector.

The underlying premise for countries like China is that a robust domestic research and development framework translates to enhanced leverage in international negotiations, thereby enabling nations to fortify cooperation while mitigating external pressures. Chen Jing, vice-president of the Technology and Strategy Research Institute, emphasized that cooperation does not need to be sacrificed for indigenous innovations. Many of China's notable technological advancements have occurred during periods of heightened Western sanctions.

Though ASML's market share in China decreased slightly from the third quarter's 42%, it still outperformed the first two quarters of the previous year. This trend reflects the ongoing demand for semiconductor technology, underscoring the complex interplay between Chinese authorities and international semiconductor firms as they strive to broaden collaboration and minimize political interference.

Chen noted that the allure of the Chinese market is a pivotal force driving both domestic growth and international interest. He articulated that should the demand for applications and systems within China diminish, the incentive for international companies to engage would similarly decline.

Looking ahead, China's AI chip market is projected to exceed 1 trillion yuan, which translates to roughly 140 billion dollars by 2028, constituting approximately 30% of the global market. This anticipated growth is bolstered by strong domestic demand, as highlighted in recent reports.

Market assessments indicate that shipments of homegrown chips have surged into the tens of thousands, illustrating a growing recognition of their performance, reliability, and cost-effectiveness. Guided by stricter export controls, China's ambition for self-sufficiency in AI chip development is gathering momentum, as detailed by the financial magazine Caijing.

The publication further revealed that at least nine Chinese AI chipmakers have reported impressive order volumes, including Huawei's Ascend series, while leading AI chip producers have achieved total shipments of around 100,000 units. Smaller players, such as Sunrise, are set to surpass orders of 10,000 units in 2025, indicating a robust and evolving domestic AI chip market.