Core Viewpoint - ASML's new CEO, Christopher de Vries, expresses significant concerns about the company's future, acknowledging that U.S. sanctions have inadvertently strengthened China's position in the semiconductor industry, particularly regarding ASML's reliance on the Chinese market and rare earth materials [3][4][20]. Group 1: Market Dependency - ASML's sales to the Chinese market accounted for 42% of total sales in Q3 2025, a significant increase from 27% in Q2 2025, highlighting the company's growing dependency on this market despite U.S. sanctions [5][8]. - The U.S. sanctions have not reduced ASML's reliance on China; instead, the company has become increasingly dependent on the Chinese market, which is now its largest revenue source [8][21]. Group 2: Competitive Threats - Chinese companies are developing their own lithography machines, posing a direct threat to ASML's market position, as they may eventually replace ASML's products [4][11]. - The advancements in semiconductor manufacturing technology by Chinese firms, such as the successful integration of advanced etching machines into TSMC's 5nm production line, indicate that China is making significant strides in critical semiconductor technologies [13][15]. Group 3: Supply Chain Risks - The CEO's concerns also stem from China's rare earth export controls, which could severely impact ASML's ability to source essential materials for its products, as China dominates over 90% of the rare earth processing market [16][19]. - ASML's High-NA EUV lithography machine, priced at $380 million, relies heavily on rare earth materials for its core components, making the company vulnerable to supply chain disruptions [17][19]. Group 4: Strategic Implications - The U.S. sanctions are viewed as a misguided strategy that not only fails to isolate China but also strengthens its resolve to innovate and develop independent capabilities in semiconductor manufacturing [20][24]. - The previous CEO, Peter Wennink, had warned that completely isolating China in the chip industry was unrealistic, a sentiment that the current CEO now recognizes as he faces the consequences of these sanctions [20][23].