Export controls on advanced semiconductors have become a central pillar of US industrial policy. By denying China access to extreme ultraviolet (EUV) lithography machines, Washington believed it had identified a durable choke point. Recent reports that China has built a prototype EUV system suggest that assumption merits reconsideration.
According to people familiar with the programme, China has constructed an experimental machine capable of generating EUV light. It is not yet producing chips and is far from commercial use. But the relevance of the development lies less in its current performance than in what it indicates about the limits of denial as a strategy.
EUV lithography was treated as exceptional. Unlike earlier generations of chipmaking equipment, EUV machines are extraordinarily complex, combining optics, power systems and software drawn from a tightly controlled transatlantic supply chain. Policymakers concluded that excluding China would lock in Western advantage.
That conclusion relied on a familiar premise: that sufficient complexity creates permanent dependence. Experience suggests otherwise. When access is blocked, states with capital and time tend to accept inefficiency in exchange for autonomy. Initial substitutes are inferior. Over time, they improve.
US policy has ensured that China is now committed to that path. Export controls have not only limited access to tools; they have removed any incentive to rely on foreign suppliers. Semiconductor development in China has accordingly shifted from commercial optimisation to strategic substitution, supported by state funding and national coordination.
The result is an effort increasingly structured around resilience rather than returns. This is costly and slow. It is also difficult to reverse. Once technologies are defined as strategic assets, domestic replication becomes a political objective, not a business decision.
This does not mean China is close to matching ASML. Commercial EUV systems reflect decades of cumulative engineering and an ecosystem that cannot be recreated quickly. Western firms remain ahead, particularly as the industry moves toward high-NA EUV. China’s early systems, if deployed, are likely to be less efficient and less reliable.
But the purpose of US policy was not simply to stay ahead. It was to deny. On that measure, success appears conditional and time-limited. Export controls have delayed progress, but they have also concentrated effort and removed ambiguity about national priorities.
The broader miscalculation is strategic. Washington created a EUV bottleneck, not an unscalable wall. It assumed excluding competitors could substitute for sustained technological leadership. In doing so, it confused monopoly with permanence.
Export controls can buy time. They cannot prevent adaptation. Determination accumulates. Choke points erode. The problem for Washington policy makers now, is how to prevent the creation of complete, rival supply chain and ecosystem, because with China’s brute manufacturing power it could create a competition the West can’t win.