China was 49% of ASML's FY2024 revenue -- a one-time pull-forward that management guides to ~20% going forward. The Dutch government restricts advanced lithography sales to China (EUV since 2019, certain DUV since 2024). The key risk: will further tightening extend to all DUV? Chinese domestic alternatives (SMEE at 90nm) are 2+ generations behind. Even a total ban would be partially offset by non-China fab expansion under CHIPS Act funding.
Export controls evolved from informal EUV block (2019) to formal DUV restrictions (2024). Currently, mature DUV remains exportable. The key risk: US pressure for broader restrictions. A total DUV ban would cost EUR 4-6B annually. The Dutch government maintains sovereign authority but closely coordinates with the US.
The China pull-forward created a EUR 7B+ revenue headwind for 2025. Q1 2025 showed China at 27% (fading gradually from 49%). The math requires non-China to grow 25-35% to deliver flat total revenue. CHIPS Act programs support this, but the timing is not dollar-for-dollar.