Semiconductor Sanctions and Military Technology: Two Chokeholds, Different Clocks

Export controls on semiconductors are usually discussed as a single weapon. They are two — pointing in opposite directions, on different clocks. Western controls on advanced chipmaking are a bet on the future; China's controls on critical minerals and mature chips are a claim on the present. Understanding the difference is the whole of the story.

The West's bet on the future

Since October 2022, the United States has built a control architecture aimed at China's frontier: rules blocking the tools to make logic below roughly 14 nanometres, then an October 2024 expansion from the Bureau of Industry and Security covering advanced packaging, high-bandwidth memory and some two dozen categories of manufacturing equipment, with well over a hundred Chinese firms added to the Entity List. The Netherlands tightened ASML's licensing in parallel: extreme-ultraviolet lithography stays barred to China outright, advanced immersion tools require licences.

The effect is real but partial. China remained close to a quarter of ASML's revenue into 2025, buying the mature-node tools the controls leave open, while SMIC pushes existing equipment toward 7nm and Huawei builds out fabs. A Chinese prototype EUV machine has been reported but is not commercially viable before roughly 2030. The emerging consensus among analysts at CSIS and CNAS is blunt: the controls are slowing China, not stopping it — and at rising cost to US and allied toolmakers.

China's claim on the present

China's countermeasures run the other way. Beijing licenses gallium and germanium (2023), then in April 2025 seven medium and heavy rare earths, then in October 2025 a foreign-product rule reaching any item with more than a trace of Chinese-origin rare earths. From 1 December 2025, requests to use rare earths for military end-use are automatically rejected. This is leverage over things already in the field: China controls roughly 70% of rare-earth mining, 90% of processing and 93% of magnet manufacturing, per CSIS — and those magnets and elements sit inside the F-35, Tomahawk, attack submarines, radar and precision munitions today. When Beijing curbed antimony in 2024, exports fell around 97% and prices roughly tripled.

The asymmetry — and where it leaves Europe

That is the asymmetry that matters. Western controls bite the capability China does not yet field; China's controls threaten the capability the West fields now. Russia is the live proof that controls on commodity silicon leak: Ukrainian teardowns of Kh-101, Iskander, Kalibr and Kinzhal missiles keep finding a hundred or more Western components — some chips dated 2025 and 2026 — routed through intermediaries in China, Hong Kong, Turkey and the UAE, as documented by OCCRP and Ukrainian investigators. The binding constraint is enforcement, not the statute.

Europe is the party most exposed to both chokeholds at once. Its defence base leans on US and Asian chips for radar, secure communications and guided weapons — and on Chinese legacy chips and rare-earth magnets it does not make. Brussels' answers are arriving: a proposed EU Chips Act 2.0 (June 2026) and the EDIP defence-industrial programme's demand that a rising share of a defence product's components come from EU or allied sources. Yet Europe holds the single irreplaceable link in the entire chain — ASML's EUV lithography — while remaining dependent downstream on the mature chips and minerals that feed its own missile lines.

The Trump-Xi truce of November 2025 suspended the harshest measures on both sides, but it is a pause, not a settlement. The strategic question outlasts it: if the binding constraint on Western munitions is no longer fab capacity but Chinese-processed magnets Beijing can switch off in ninety days — and the constraint on China is a frontier it reaches by 2030 regardless — is the West's control regime buying strategic time, or front-loading the day its arsenal discovers what it cannot source? And can an allied-origin sourcing rule mean much while a single Kh-101 still flies on a hundred Western chips?