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ASML Holding, the world's top supplier of advanced chipmaking equipment caught in the US-China tech rivalry, will build a "reuse and repair" centre in Beijing this year, showing its commitment to the world's second-largest economy despite pressure from Washington.
The Dutch firm, which has been unable to sell its extreme ultraviolet lithography systems to its China-based clients to comply with US export control rules, disclosed the plan for the facility in the Chinese capital in its annual report published on Wednesday.
It is the only major project in the report's "circular economy" section about parts and tools.
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It has been previously reported that the Dutch government could limit ASML's ability to repair and maintain its semiconductor equipment on the mainland. China is ASML's largest market, accounting for 36.1 per cent of its total sales in 2024, replacing Taiwan for the first time, according to the annual report.
The company's sales on the mainland stood at €10.2 billion (US$10.9 billion) last year, while Taiwan accounted for €4.3 billion or 15.4 per cent of the total.
Taiwan was the top market in 2023 with revenues of €8.1 billion, compared with €7.3 billion on the mainland. In 2022, ASML's sales in China came in at €2.9 billion, representing 13.8 per cent of the total.
The strong performance of the mainland market was "supported by a high backlog built over [the] previous [few] years" in terms of lithography system sales, ASML said, anticipating "a shift to more normalised sales levels to China moving forward" after the backlog was fulfilled.
In addition, ASML said its memory-chip-equipment business was strong last year "due to technology transitions driven by artificial intelligence-related memory demand", adding that China accounted for the largest absolute geographic sales.
However, ASML said its sales to China could be affected by geopolitical risks, as its "ability to deliver systems and services in certain countries such as China has been the subject of increased export regulations or policies".
The company's operations in China have been hurt by sanctions imposed by the US, the Netherlands and Japan. Exports of some of the most advanced systems made by companies in these countries to Chinese clients require special approval.