ASML Forced To Suspend Some China Exports After US Escalates Tech Battle

The firm announced on Monday that the Dutch government has ordered ASML to restrict the sale of part of its chip-making equipment to China.

The curb comes after the United States increased its restrictions on the sorts of semiconductors that American companies can sell to China and encouraged its allies to do the same.

ASML, a manufacturer of semiconductor production equipment based in Veldhoven, the Netherlands, said in a statement that its “license for the shipment of NXT:2050i and NXT:2100i lithography systems in 2023 has recently been partially revoked by the Dutch government,” and that the decision would affect “a small number of customers in China.”

ASML Forced To Suspend Some China Exports After US Escalates Tech Battle

ASML is well-known for its expertise in manufacturing lithography devices, which use light to print patterns on silicon. That step is critical in bulk fabricating microchips, which run everything from smartphones to washing machines.

Experts have identified ASML’s market domination as a sign of the widening schism between China and the West over access to innovative technologies.

For many years, the Dutch government has been under pressure from the United States to limit chip exports to China.

In October, the Biden administration released new rules based on a broad set of export limitations initially implemented in 2022. ASML stated when the guidelines were modified that due to “the length and complexity of the regulations, ASML will need to carefully assess any potential implications.”

ASML Forced To Suspend Some China Exports After US Escalates Tech Battle

During an earnings call in October, ASML Chief Executive Peter Wennink stated that the revised export limits would harm 10% to 15% of the company’s Chinese revenues.

In a statement issued on Monday, the business stated that after conversations with the US government, it “has obtained further clarification of the scope and impact of the US export control regulations.”

However, the company does not “expect the current revocation of our export license or the latest US export control restrictions to have a material impact on our financial outlook for 2023,” the company said.

ASML Forced To Suspend Some China Exports After US Escalates Tech Battle

China retaliated on Tuesday, labelling the US limits “hegemonic” and “bullying.”

These steps will “undermine the global semiconductor landscape,” according to Foreign Ministry spokesperson Wang Wenbin. “It will only backfire against the US.”

He also encouraged the Netherlands to “protect the common interests of businesses from both countries with concrete action,” and to create a “non-discriminatory business environment.”

SOURCE – (CNN)