- Huawei, SMIC rely on ASML machines for advanced chipmaking
- China cannot replicate ASML’s advanced lithography systems yet
The ASML Holding NV headquarters and factory in Veldhoven, Netherlands. Photographer: Peter Boer/Bloomberg
The Netherlands plans to limit ASML Holding NV’s ability to repair and maintain its semiconductor equipment in China, a potentially painful blow to Beijing’s efforts to develop a world-class chip industry.
The government of Prime Minister Dick Schoof will likely not renew certain ASML licenses to service and provide spare parts in China when they expire at the end of this year, according to people familiar with the matter. The decision is expected to cover the company’s top-of-the-line deep ultraviolet lithography, or DUV, machines, said the people, asking not to be named discussing sensitive government decisions.
The Dutch company’s chip-making equipment, the most advanced in the industry, is sold with maintenance agreements that are essential to keep them running. Withdrawing such support could render at least some of them inoperable as soon as next year.
ASML and the Dutch foreign trade ministry declined to comment.
The Dutch government’s decision comes after some pressure from the US. A senior Biden administration official said the US government had raised the possibility of imposing certain unilateral measures on partner countries, including what’s known as the foreign direct product rule, if those allies didn’t agree to align their China controls with the US.
The rule, also known as FDPR, allows American officials to control the flow of foreign products built with even the smallest amount of US-originated technology. The most important countries for chip-making equipment, in addition to the US, are the Netherlands, Japan and South Korea. Bloomberg News reported previously that the Biden administration threatened the use of the FDPR to get allies to come on board.
The Dutch government under former Prime Minister Mark Rutte resisted US pressure to add restrictions on servicing, arguing for more time to evaluate the impact of export bans on high-end chip-making equipment.
Dick SchoofPhotographer: Remko de Waal/AFP/Getty Images
The new government headed by Schoof, a former spy chief, has signaled a wary approach to China. The Netherlands has to be “very careful” in talks with Beijing over national security, he told Bloomberg News in an interview this month.
Asked whether the Dutch government is considering new export controls this year, Schoof said his government has “good negotiations” with the US and Japan and expects they will “end with good results.”
The Biden administration has implemented sweeping export controls on China with the goal of limiting development of its chip sector, in the name of national security. Blocking ASML from servicing its restricted machines in China will put the company under the same constraints as American peers, including Applied Materials Inc. The US pressed the Dutch government for tighter restrictions on ASML’s China business earlier this year.
- China cannot replicate ASML’s advanced lithography systems yet
The ASML Holding NV headquarters and factory in Veldhoven, Netherlands. Photographer: Peter Boer/Bloomberg
The Netherlands plans to limit ASML Holding NV’s ability to repair and maintain its semiconductor equipment in China, a potentially painful blow to Beijing’s efforts to develop a world-class chip industry.
The government of Prime Minister Dick Schoof will likely not renew certain ASML licenses to service and provide spare parts in China when they expire at the end of this year, according to people familiar with the matter. The decision is expected to cover the company’s top-of-the-line deep ultraviolet lithography, or DUV, machines, said the people, asking not to be named discussing sensitive government decisions.
The Dutch company’s chip-making equipment, the most advanced in the industry, is sold with maintenance agreements that are essential to keep them running. Withdrawing such support could render at least some of them inoperable as soon as next year.
ASML and the Dutch foreign trade ministry declined to comment.
The Dutch government’s decision comes after some pressure from the US. A senior Biden administration official said the US government had raised the possibility of imposing certain unilateral measures on partner countries, including what’s known as the foreign direct product rule, if those allies didn’t agree to align their China controls with the US.
The rule, also known as FDPR, allows American officials to control the flow of foreign products built with even the smallest amount of US-originated technology. The most important countries for chip-making equipment, in addition to the US, are the Netherlands, Japan and South Korea. Bloomberg News reported previously that the Biden administration threatened the use of the FDPR to get allies to come on board.
The Dutch government under former Prime Minister Mark Rutte resisted US pressure to add restrictions on servicing, arguing for more time to evaluate the impact of export bans on high-end chip-making equipment.
Dick SchoofPhotographer: Remko de Waal/AFP/Getty Images
The new government headed by Schoof, a former spy chief, has signaled a wary approach to China. The Netherlands has to be “very careful” in talks with Beijing over national security, he told Bloomberg News in an interview this month.
Asked whether the Dutch government is considering new export controls this year, Schoof said his government has “good negotiations” with the US and Japan and expects they will “end with good results.”
The Biden administration has implemented sweeping export controls on China with the goal of limiting development of its chip sector, in the name of national security. Blocking ASML from servicing its restricted machines in China will put the company under the same constraints as American peers, including Applied Materials Inc. The US pressed the Dutch government for tighter restrictions on ASML’s China business earlier this year.
