The home country of semiconductor equipment maker ASML wants to protect its own economic interests.
In the 1980s, American policymakers saw Japanese chip makers as their biggest threat.
Washington has imposed unprecedented restrictions on US citizens and residents who work for Chinese semiconductor companies.
Beijing criticises Washington after US announces new export controls aimed at restricting China's ability to buy and manufacture high-end chips.
In response to the US announcing further export controls targeting China, Taiwan's Economy Ministry said the country's firms were law-abiding.
Washington does not have any "short-term solution to dependence on Taiwan's industry at this moment," says Melaine Sisson, a US national security strategy expert, calling government's $52 billion to help American chipmakers a "long-term approach."
The EUV lithography machines are essential to producing modern chips. And the US has stopped China from acquiring them.
Scientists at the University of Illinois at Urbana-Champaign can remove tin contamination from ultraviolet lithography machines manufactured by the Netherlands-based ASML, which is at the centre of the US-China chip war.
The planned action comes as President Joe Biden's administration has sought to thwart China's advances by targeting technologies where the United States still maintains dominance.
SMIC has developed a 7nm semiconductor, placing the Chinese behemoth in the league of Intel and others.
"If Congress doesn't act very quickly," key producers like Samsung, Intel and Micron "are going to build in another country and that would be hugely problematic," says US Commerce Secretary Gina Raimondo.
US President Joe Biden arrives in South Korea on the first leg of his Asia trip and will travel to Japan where he will attend a regional summit of the Quad - a grouping of Australia, India, Japan and the United States.
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