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Dutch export rules on China in focus ahead of ASML results

Daniel Nenni

Daniel Nenni

Admin
Staff member
* Government expected to impose new limits on ASML sales to China
* ASML generates 15% of its sales in China
* Expected to report record Q4 sales on Jan. 25

AMSTERDAM, Jan 20 (Reuters) - Expectations that the Dutch government will further limit sales to China by chip equipment giant ASML Holding NV may overshadow what are expected to be strong fourth quarter results due next week.

The Hague is expected to impose at least some additional restrictions on ASML's exports to China, a Dutch government source familiar with security discussions between the United States and Netherlands told Reuters, though they could not give a timeframe.

ASML, a key supplier to chipmakers, generates about 15% of its sales in China, an important growth market even after it was restricted from selling its most advanced machines there under U.S. pressure in 2019.

Tensions between Washington and Beijing over semiconductors have since steadily worsened.

Washington in October imposed export restrictions on its own chip equipment companies aimed at hobbling China's ability to make chips and to blunt its military progress.

U.S. officials say they expect the Netherlands to follow suit.

 
F

Fred Chen

Moderator
The Dutch foreign trade minister did not signal going along so easily:
www.firstpost.com

Dutch foreign trade minister refuses to give in to US pressure to curb chip exports to China

The US has been trying to cajole Japan and the Netherlands to impose some strict sanctions that would cripple China’s chip-making industry. China is the second largest chip manufacturer after Taiwan and a vital cog in the global semiconductor trade.
www.firstpost.com www.firstpost.com

“Obviously in order to have the [semiconductor] value chain still in place, we need open trade,” said Schreinemacher during a panel discussion on the lessons to be learned from semiconductor supply shocks. She also said that big-ticket government subsidies were not her “definition of open trade”. “I know this area is under a lot of pressure internationally, but I will be fighting for open trade and prevent protectionism,” said Schreinemacher.
 
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Jozo035

Member
Is that lack of understanding or another case of corruption?

ASML can achieve utilization over 100% purely with western fab capacity buildup.
On the other hand, ASML is already losing markets thanks to cheap compatible copies of lithography machines from china.

And most importantly, They are ignoring that chinese goal is not free-trade. They are ignoring that chinese goal is self-sufficiency (war resistant economy). That means that ASML will lose this market anyway. Question is only whether will they hand over all their IP for free.

By the way, there is no need to pressure Japan. Chinese missiles falling into Japanese territories are effective enough.
 
F

Fred Chen

Moderator
Jozo035 said:
Is that lack of understanding or another case of corruption?

ASML can achieve utilization over 100% purely with western fab capacity buildup.
On the other hand, ASML is already losing markets thanks to cheap compatible copies of lithography machines from china.

And most importantly, They are ignoring that chinese goal is not free-trade. They are ignoring that chinese goal is self-sufficiency (war resistant economy). That means that ASML will lose this market anyway. Question is only whether will they hand over all their IP for free.
Click to expand...
...unless ASML is getting some parts from China itself.
 
F

Fred Chen

Moderator
The key question is whether Chinese fabs are able to sustain their use of the advanced equipment they have so far.

With an apparent announced retreat to mature nodes, it is not clear even in that case how long it can be sustained.
 
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benb

Active member
I perceive, my opinion, 4 steps to a cycle: 1) Sell stuff to China 2) China reverse engineers it 3) A Chinese competitor emerges 4) Now you don’t sell stuff to China, China sells your stuff to everyone.

ASML is/was in stage 1, the nice stage. Why do we think stage 1 will last? Why is high technology trade with China still a thing?
 
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blueone

Well-known member
benb said:
I perceive, my opinion, 4 steps to a cycle: 1) Sell stuff to China 2) China reverse engineers it 3) A Chinese competitor emerges 4) Now you don’t sell stuff to China, China sells your stuff to everyone.

ASML is/was in stage 1, the nice stage. I wonder sometimes, why would ASML sell to China? Can’t they see how this ends?
Click to expand...
I can see the cycle you describe happening in consumer goods, perhaps even airliners (COMAC), but can you name even one example where it's happened in chip design or manufacturing? Huawei, for example, perhaps China's best example of a high-tech manufacturer, developed their own products. They often used other technologies in their products, like Android to name one, but they don't seem to me to be an example of your cycle. Many Huawei products were just good, to my knowledge. Their telecom equipment is not trusted due the perception that the Chinese government can control them and use their equipment to spy on other countries, but by all accounts they are lower-priced and good performers, and not copies or derivatives.
 
T

tonyget

Active member
blueone said:
Their telecom equipment is not trusted due the perception that the Chinese government can control them and use their equipment to spy on other countries
Click to expand...

Which country oustside of the west don't trust Huawei？I saw this video interview，they talked about that so far the US has not been successful in persuade countries of the global south to abandon Huawei. Americans warn them that China will spy them via Huawei hardware，they reply：so what？the US will also spy them if they use western hardware. To these countries，it makes no difference whether it's US or China spy on them. And since they will get spied anyway，they will just choose the cheaper option

And yes，real high-tech product contains many know-how which can not be easily copied
 
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Jozo035

Member
It is more complicated...

China is borrowing them lot of money trough Belt and road (or similar projects) under rough conditions. And any infrastructure co-financed this way MUST be build on chinese platforms (by chinese workers). So it is not like they want great chinese 5G networks in rural Kenya. This is their only option if they want accessible loans and spreading propaganda against west is part of their agreement.

And of course, it is only temporally, because it is just debt trap and countries are falling into bankruptcy or hard nationalism... It is actually very sad and dirty...

blueone said:
Huawei, for example, perhaps China's best example of a high-tech manufacturer, developed their own products.
Click to expand...
Seriously? :D For example Cisco right at begining. Or 4G/5G base stations strangely similar to western parts... Or in consumer segment often making exact copies of Apple and others..
blueone said:
Their telecom equipment is not trusted due the perception that the Chinese government can control them and use their equipment to spy on other countries,
Click to expand...
I think they have law for that.
Plus there was huge crackdown lately and basically every bigger company have CCP officials in board.
blueone said:
... but by all accounts they are lower-priced and good performers, and not copies or derivatives.
Click to expand...
Actually, it was only until they were sponsored by CCP. But right after they gained dominant position, they greatly increased prices...

Huawei in EU failed because they were just too expensive. Nobody wanted to pay 1300€ for their phones. And Xiaomi is in similar position. Samsung just offers better value.
Actually lot of people here believe, that Iphone SE/11/12 offers better value than Xiaomi.
 
B

blueone

Well-known member
Jozo035 said:
It is more complicated...

China is borrowing them lot of money trough Belt and road (or similar projects) under rough conditions. And any infrastructure co-financed this way MUST be build on chinese platforms (by chinese workers). So it is not like they want great chinese 5G networks in rural Kenya. This is their only option if they want accessible loans and spreading propaganda against west is part of their agreement.
Click to expand...
I agree, but their infrastructure escapades aren't related to my comment.
Jozo035 said:
Seriously? :D For example Cisco right at begining. Or 4G/5G base stations strangely similar to western parts... Or in consumer segment often making exact copies of Apple and others..
Click to expand...
Huawei is not alone... the US company Arista Networks had to pay Cisco $400M to settle a copyright infringement case. And Arista also lost a jury trial for infringing on 14 Cisco patents.

Which Apple products were copied exactly by Huawei (or any company in China)?
Jozo035 said:
I think they have law for that'
Click to expand...
Yes, China does. That law appears to be at the root of the US government's lack of trust in Huawei.
Jozo035 said:
Plus there was huge crackdown lately and basically every bigger company have CCP officials in board.

Actually, it was only until they were sponsored by CCP. But right after they gained dominant position, they greatly increased prices...

Huawei in EU failed because they were just too expensive. Nobody wanted to pay 1300€ for their phones. And Xiaomi is in similar position. Samsung just offers better value.
Actually lot of people here believe, that Iphone SE/11/12 offers better value than Xiaomi.
Click to expand...
That's news to me. Can you point to links regarding these price increases?
 
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blueone

Well-known member
tonyget said:
Absolutely. Ever heard of Edward Snowden？
Click to expand...
They're not equivalent. The NSA was illegally tapping phone systems in the US, not in foreign countries. And the NSA was tapping into cloud computing companies' datacenters - with the assistance of the cloud companies, and monitoring the internet traffic and cloud storage that went through those datacenters of, well, anyone they felt like who was using those clouds. Including people from outside the US, apparently. Snowden leaked all of this, and supposedly the NSA is now better behaved. Supposedly.

What the US government is accusing Huawei of is allowing the Chinese government to monitor people in other countries via telecom equipment housed in the foreign countries, via secret hardware and software backdoors. And apparently the existence of these backdoors have been verified, but I'm not fully convinced. I remember when Bloomberg was saying that China was implanting secret chips on Supermicro motherboards, and there was no definitive proof of that revealed either. Given the policies of the Chinese government I could believe they ordered these backdoor capabilities, but extraordinary claims require solid evidence.

You need a better analogy.
 
T

tonyget

Active member
Jozo035 said:
Huawei in EU failed because they were just too expensive. Nobody wanted to pay 1300€ for their phones. And Xiaomi is in similar position. Samsung just offers better value.

Actually lot of people here believe, that Iphone SE/11/12 offers better value than Xiaomi.
Click to expand...

Really？According to statistics，Xiaomi and Realme's market share increased in 2022 Q3 in Europe

www.counterpointresearch.com

Europe Smartphone Market Down 16% YoY in Q3 2022; Sequential Growth Hints at Stabilisation

The European smartphone market continued to suffer from a deteriorating economic climate with shipments declining by 16% year-on-year in Q3 2022.
www.counterpointresearch.com www.counterpointresearch.com
 
T

tonyget

Active member
blueone said:
They're not equivalent. The NSA was illegally tapping phone systems in the US, not in foreign countries. And the NSA was tapping into cloud computing companies' datacenters - with the assistance of the cloud companies, and monitoring the internet traffic and cloud storage that went through those datacenters of, well, anyone they felt like who was using those clouds. Including people from outside the US, apparently. Snowden leaked all of this, and supposedly the NSA is now better behaved. Supposedly.
Click to expand...

Ever heard of the story of US intelligence agency tapping european leaders ？That's just a tip of iceberg of US worldwide surveillance system

www.theguardian.com

CIA controlled global encryption company for decades, says report

Swiss government orders inquiry after revelations Crypto AG was owned and operated by US and German intelligence
www.theguardian.com www.theguardian.com

This is a story of a CIA controlled company selling hardwares with backdoor all over the globe for over half a century already


blueone said:
What the US government is accusing Huawei of is allowing the Chinese government to monitor people in other countries via telecom equipment housed in the foreign countries, via secret hardware and software backdoors. And apparently the existence of these backdoors have been verified, but I'm not fully convinced. I remember when Bloomberg was saying that China was implanting secret chips on Supermicro motherboards, and there was no definitive proof of that revealed either. Given the policies of the Chinese government I could believe they ordered these backdoor capabilities, but extraordinary claims require solid evidence.
Click to expand...

The US is so worried about Huawei products，is because CIA can not implement backdoor on it，thus America will lose lots of intelligence
 
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