Why ASML's Semiconductor Monopoly Doesn't Give Europe Strategic Control

Calls for European technological sovereignty are growing louder. In early June, the European Commission unveiled a new package of proposals, including a Chips Act 2.0, aimed at reducing the bloc's dependence on foreign technologies.

Days later, the limits of that ambition became clear. The US government ordered AI company Anthropic to suspend access to its most advanced models for users outside the United States before later easing the restrictions. For nearly three weeks, a single directive from the United States cut Europeans off from Anthropic's most capable AI models before Washington lifted the restrictions after negotiations with the company. The episode illustrated how quickly access to a frontier technology can become subject to US export controls.

But the incident revealed something bigger. Even when critical technologies are developed or used outside the United States, Washington often retains the ability to determine who can access them. Nowhere is that tension more visible than in Europe's most strategically important technology company: ASML.

The Dutch company spun out of Philips in 1984 and builds the photolithography machines that print the circuitry for computer chips. For the most advanced chips, ASML is the world's only manufacturer of extreme ultraviolet (EUV) lithography systems, the machines required to produce them. Every leading-edge processor produced for companies such as Apple, Nvidia and AMD depends on ASML equipment somewhere in the manufacturing process. In June, it became the first European company ever to pass a market value of 700 billion dollars, making it the most valuable listed company in the continent's history.

To many policymakers, that monopoly looks like Europe's greatest source of geopolitical leverage. If the world cannot build advanced chips without ASML, then surely Europe has a powerful bargaining chip. The question is whether Europe can actually exercise that leverage. That position has led some policymakers to view ASML as a potential geopolitical chokepoint. Economists describe such positions as technological chokepoints: single points in a supply chain through which entire industries must pass. Europe 2031, a widely circulated scenario by AI researchers examining Europe’s technological future, treats ASML as one of the continent’s few remaining sources of strategic leverage.

Niclas Poitiers and Tillman Schenk from the Brussels think tank Bruegel describe this dynamic as sovereignty through indispensability. But that argument rests on a key assumption — that Europe can act as a unified geopolitical actor in export controls.

Let’s start with the market. ASML's sales are almost entirely in Asia and the United States, with Taiwan's TSMC as its largest customer. As ASML chief executive Christophe Fouquet recently pointed out, less than one percent of the company's more than 32 billion euros in revenue came from the European region in 2025. Europe has fallen behind, he said, and encouraged more investment in the AI and semiconductor ecosystems.

Now consider the technology. ASML draws on a network of thousands of suppliers across dozens of countries for its products. Its optics come from Germany's Zeiss. Critical precision components are sourced from suppliers in the United States, Japan and Taiwan. And the light source at the heart of every machine is developed and built in San Diego, California, by an ASML division that grew out of the American firm Cymer. The supply chain — and the technology base — are anything but exclusively European, and that matters.

The US Foreign Direct Product Rule (FDPR) allows Washington to control products made outside the United States if they rely on American technology or software. It is one of the main mechanisms through which US export controls extend beyond its borders. The monopoly is Dutch in corporate terms but embedded in a broader transatlantic technology stack.

Then there is the law. It would not be the first time the Netherlands has restrained ASML, but it has always done so under American pressure. In 2019, after a visit by then Prime Minister Mark Rutte to the White House, The Hague withdrew the export license for the most advanced machines bound for China. In 2023, further restrictions were introduced on additional equipment, a significant blow to ASML, since China accounted for roughly a third of its revenue. In both cases, Dutch policy moved in step with US strategic priorities.

Some, like Niclas Poitiers and Tillman Schenk, argue that if Washington depends on Dutch cooperation to restrict ASML’s advanced lithography from China, then that dependence becomes a form of European leverage. The reasoning is sound, but it conflates "Europe" with the Netherlands. Export control is a national competence under EU law, and Washington prefers to deal with individual capitals at a time. The apparent European chokepoint is therefore exercised at the national level.

But the dependence is not symmetrical. The Netherlands has far fewer substitutes for US markets, components, and regulatory alignment than the United States has for Dutch consent. Washington also retains unilateral reach through the Foreign Direct Product Rule, a tool The Hague cannot match. The result is asymmetry rather than shared leverage.

What began as diplomatic pressure now edges toward legislation. Before the US Congress sits the MATCH Act, a bipartisan bill introduced in April that would prohibit the sale and servicing of advanced machines to Chinese chipmakers, a double commercial blow for ASML. The bill would give the Netherlands and Japan 150 days to align their export controls with the American ones. If they fail to, it directs Washington to extend the Foreign Direct Product Rule to any machine containing even a single American component or piece of software. For ASML, that means nearly everything it builds. Whether that extension ever materializes is uncertain. But the threat alone is real.

This month, the pressure arrived directly when US Commerce Secretary Howard Lutnick told ASML's executives that Washington believes one of its extreme ultraviolet machines may have reached China, in breach of the very ban that has kept EUV out of the country from the start. ASML rejected the claim. It said it has never shipped an EUV system or a purpose-built component to China, and that it can account for every installed machine through remote telemetry. With the MATCH Act still under discussion, Dutch officials have increasingly engaged Washington directly. Rather than apply pressure of its own, The Hague sent a trade delegation to lobby against the bill. It was an illustration of where leverage currently sits.

Europe does hold a unique instrument in ASML, a real chokepoint in the advanced chip industry. But it cannot wield it freely, because the market, the technology, and the legal weight all lie on the other side of the Atlantic. Anyone who thinks this is a theoretical scenario need only look at the Anthropic episode. The one country that can turn the screw on Europe's most valuable company is not the Netherlands. It is the United States.