U.S. Seeks to Extend Chip Equipment Controls to Maintenance as U.S., Japanese, and Dutch Equipment Suppliers Reassess China Exposure

U.S. restrictions on China’s semiconductor industry are expanding from advanced chips and new equipment exports to equipment maintenance, component supply, and coordination with allied countries. In April 2026, bipartisan lawmakers in the U.S. Congress introduced the Multilateral Alignment of Technology Controls on Hardware Act, or MATCH Act, seeking to narrow the differences among the export control regimes of the United States, the Netherlands, and Japan and restrict China’s access to critical wafer fabrication equipment for which it has yet to establish stable domestic production capabilities.

As of July 22, 2026, the MATCH Act remains in the legislative process and has not yet become an official ban. On April 22, the House Foreign Affairs Committee advanced H.R. 8170, making it eligible for consideration by the full House of Representatives. The Senate has also introduced a corresponding version, S. 4281, which remains under committee review. Neither bill has completed a floor vote, and the final control list, effective date, and methods of allied cooperation may still be adjusted.

MATCH Act Calls for Further Alignment of U.S., Japanese, and Dutch Control Standards

Existing semiconductor equipment controls are implemented separately by each country. The United States has restricted the export to China of certain equipment used in advanced logic, DRAM, and NAND production and has imposed stricter export licensing requirements on specific Chinese companies and wafer fabs. The Netherlands prohibits ASML from exporting extreme ultraviolet, or EUV, systems to China, while certain more advanced immersion deep ultraviolet, or DUV, systems also require licenses. Since July 2023, Japan has placed 23 categories of advanced semiconductor manufacturing equipment, including lithography, etching, deposition, cleaning, and inspection equipment, under export licensing controls. Japan’s rules formally apply to all export destinations and are not directed solely at China, but its equipment list and licensing regime remain an important foundation for U.S. efforts to align allied controls.

The latest forecast released by the Semiconductor Equipment Association of Japan, or SEAJ, in July 2026 shows that sales of Japanese-made semiconductor manufacturing equipment are expected to increase by 26% to JPY 6.55 trillion in fiscal year 2026 and rise by another 13% to JPY 7.40 trillion in fiscal year 2027. Advanced logic chips required for AI servers, as well as HBM and DRAM capacity expansion, remain the main forces supporting demand for Japanese equipment.

The three countries do not apply identical equipment lists, end-user definitions, or maintenance restrictions, and U.S. equipment suppliers generally face stricter constraints. Chinese companies may therefore still purchase equipment from foreign suppliers subject to more lenient restrictions or place equipment at mature-node facilities that are not directly controlled. The MATCH Act requires the United States to prioritize negotiations with equipment-supplying countries such as the Netherlands and Japan and encourage allies to adopt rules with equivalent practical effects. If the bill becomes law and negotiations fail, the U.S. government would be required to use the Export Administration Regulations, critical components subject to U.S. jurisdiction, or other measures to expand restrictions on relevant foreign-made equipment, end uses, and maintenance activities.

The original version of the bill proposed broader restrictions on immersion DUV and cryogenic etching equipment, prompting opposition from equipment suppliers. A subsequent revised version removed the China-wide ban on cryogenic etching equipment but retained the direction of controls on immersion DUV systems, specific Chinese wafer fabs, and their affiliated entities.

Control Focus Expands From New Equipment to the Operation of Installed Tools

Semiconductor equipment requires long-term support from original manufacturers. After installation, lithography, etching, and deposition equipment still requires regular calibration, consumable replacement, software updates, component repairs, and technical services from engineers. Even if equipment has already entered China, the inability to obtain continued maintenance from original suppliers could affect long-term operating efficiency, yield, and capacity utilization.

Maintenance restrictions may therefore have a more persistent impact than simply prohibiting exports of new equipment. Chinese wafer fabs may increase inventories of spare parts in advance or seek third-party maintenance services, but high-end equipment involves precision components, proprietary software, and process parameters that third-party providers may struggle to fully replace. If the MATCH Act is formally implemented, export controls would extend from the equipment delivery stage to the entire operating life cycle.

Company-level controls could also reduce room for internal equipment transfers. In the past, when restrictions focused on specific facilities, companies could still purchase equipment through mature-node fabs that were not listed and then adjust its use internally within the group. The new framework would examine wafer fabs, owners, and affiliated entities together, potentially exposing companies such as Semiconductor Manufacturing International Corporation (SMIC), ChangXin Memory Technologies (CXMT), Yangtze Memory Technologies (YMTC), Hua Hong Group, and Huawei to broader equipment and service restrictions.

China Accounts for About 20% of ASML Revenue, Making DUV and Service Businesses the Main Risks

ASML has the clearest exposure to the new round of policy risks. China accounted for approximately 33% of ASML’s total revenue in 2025. In the second quarter of 2026, the company continued to estimate that China would contribute about 20% of its full-year net sales, with incremental demand mainly coming from China’s domestic logic chip business.

ASML reported revenue of EUR 9.326 billion and net income of EUR 2.918 billion in the second quarter of 2026. Revenue from its Installed Base Management business, which is related to equipment maintenance and field upgrades, reached EUR 2.762 billion. This shows that policy risks could affect not only new system sales but also maintenance, upgrades, and component revenue.

Immersion DUV is currently the most closely watched equipment category. China has long been unable to obtain EUV systems but can still purchase certain DUV systems for mature-node production and for some advanced logic, DRAM, and NAND processes. If restrictions are expanded to all immersion DUV systems, the range of equipment available to Chinese wafer fabs would narrow further, while ASML’s new system and service revenue would also come under pressure.

However, China’s revenue share cannot be directly equated with potential losses. The final impact will still depend on equipment models, customer lists, Dutch government licensing policies, and whether installed systems can continue to receive service. ASML is also benefiting from global AI investment and has raised its 2026 revenue forecast to between EUR 43 billion and EUR 45 billion. Advanced logic and memory capacity expansion in Taiwan, South Korea, and the United States could provide a degree of offset to weaker business in China.

Tokyo Electron Has Greater China Exposure as Risks Shift Toward Specific Customers and Service Revenue

Tokyo Electron, or TEL, holds important positions in etching, thin-film deposition, coating and developing, and thermal processing equipment. China accounted for 34.1% of TEL’s revenue in the fiscal year ended March 2026, higher than ASML’s estimate that China will contribute about 20% of its 2026 revenue, indicating that TEL is more sensitive to changes in semiconductor equipment investment in China.

The original version of the bill proposed a comprehensive ban on exports of cryogenic etching equipment to China, and Tokyo Electron was viewed as one of the main companies at risk because it offers relevant product lines. After the revised version removed this broad ban, the risk shifted toward specific customers such as Semiconductor Manufacturing International Corporation, ChangXin Memory Technologies, and Yangtze Memory Technologies, as well as maintenance and technical support at controlled facilities.

Tokyo Electron’s service revenue is also significant. In the fiscal year ended March 2026, revenue from its Field Solutions business reached JPY 626 billion, an increase of 16.3% from the previous year, including components, maintenance, and equipment modifications. If maintenance activities require case-by-case licenses, the impact would gradually extend from new equipment orders to revenue from the installed base.

Nikon is also a supplier of immersion DUV equipment. Although its market scale is smaller than ASML’s, Nikon products could also be included if the final rules are determined according to equipment performance.

U.S. Equipment Suppliers May Narrow the Competitive Gap, but the China Market Will Continue to Contract

U.S. equipment suppliers such as Applied Materials, Lam Research, and KLA have long been subject to U.S. export rules, and their equipment sales and technical support to certain advanced Chinese wafer fabs are already restricted. These companies have long argued that Dutch and Japanese suppliers face more lenient restrictions, allowing Chinese customers to shift purchases toward non-U.S. suppliers.

If allied rules are raised to similar levels, the relative competitive disadvantage of U.S. equipment suppliers in China may narrow. However, an expansion of the list of critical facilities and additional maintenance licensing requirements would still reduce their equipment and service revenue. The main benefit for U.S. equipment suppliers would be more consistent competitive conditions rather than renewed growth in China-related business.

The Dutch government has expressed concerns about the United States expanding extraterritorial jurisdiction. Although the Netherlands supports restrictions on sensitive semiconductor technologies, it prefers that export licensing decisions be made independently by the Dutch government and the European Union. Whether Japan is willing to adopt the same Chinese entity lists, equipment standards, and maintenance restrictions as the United States will also affect the actual effectiveness of the legislation.

Chinese Wafer Fabs Will First Face Slower Expansion and Higher Maintenance Costs

The short-term pressure on Chinese wafer fabs will be concentrated on equipment access, production line expansion, and the maintenance of installed equipment. Logic chip, DRAM, and NAND production requires lithography, etching, deposition, cleaning, and inspection equipment to operate together. Restrictions on a single equipment category may not immediately halt existing production lines, but they could lengthen expansion schedules, increase the difficulty of equipment allocation, and limit process upgrades.

Maintenance and component restrictions would increase operating risks for installed equipment. Chinese companies may accelerate the adoption of domestically produced equipment, but equipment substitution must still undergo reliability, yield, and mass-production validation and cannot be completed simply by delivering a machine. The more likely short-term outcomes are slower capacity expansion, higher production costs, and increased inventories of components and spare parts at wafer fabs.

Over the longer term, external restrictions will encourage China to increase investment in domestic lithography, etching, deposition, and inspection equipment. However, the degree of localization varies significantly across equipment categories. Even if some domestic equipment has entered production lines, the overall process still requires multiple types of equipment, materials, and software to operate together, meaning localization will not be completed simultaneously across the entire production chain.

U.S.-Japan-Netherlands Coordination Will Determine the Actual Strength of the Controls

The first issue to monitor is whether the MATCH Act can pass the House and Senate and whether the final text retains core provisions covering immersion DUV systems, affiliated entities, and maintenance licensing. If the bill fails to pass as standalone legislation, some provisions could still be incorporated into the National Defense Authorization Act or other major legislative packages.

The second key issue is whether the United States, the Netherlands, and Japan can establish common standards. If allies independently introduce rules with equivalent effects, the United States could reduce controversy over the direct expansion of extraterritorial jurisdiction. If negotiations fail, the United States may use U.S.-origin technology, components, and export administration rules to increase compliance pressure on foreign equipment suppliers.

The impact of the new round of equipment controls would gradually expand from whether new systems can be shipped to whether installed equipment can be maintained, upgraded, and kept in operation. ASML and Tokyo Electron would continue to benefit from global AI capital expenditure, but their China orders, service revenue, and regulatory costs would face reassessment. For Chinese wafer fabs, the pressure would also expand from shortages of advanced-process equipment to mature-node capacity expansion and the maintenance of installed production capacity.