In recent news, Dutch lawmakers have expressed concerns over the United States’ unilateral imposition of new rules regulating the export of chipmaking machines produced by ASML Holding to China.
Last week, the United States unveiled fresh regulations that grant Washington the authority to limit the export of ASML’s Twinscan NXT1930Di machine, which is headquartered in Veldhoven, whenever it incorporates even a single U.S. component.
The ongoing debate has ignited discussions about the role of European countries and the European Union (EU) in addressing such issues, underscoring the need for a unified approach to trade regulations and technology exports.
This blog post delves into the details of the controversy and the arguments presented by Dutch Trade Minister Liesje Schreinemacher.
ASML and Its Advanced Technology
ASML Holding, headquartered in Veldhoven, the Netherlands, is a global leader in the field of lithography equipment, a crucial component in semiconductor manufacturing.
Their machines are used by major chipmakers such as TSMC, Samsung, and Intel to create intricate circuitry on microchips.
ASML’s deep ultraviolet (DUV) lithography machines play a pivotal role in producing a wide range of chips, from advanced computer chips to mid-range and older models. Given its importance in the tech industry, ASML’s products have become a focal point in the global technology trade.
Read More: 10-15% Sales Hit For ASML in China Amidst US Ban
US Export Rules
Under the new US export rule, ASML’s NXT:1980Di DUV lithography equipment will face restrictions when Chinese buyers intend to use it for producing high-end semiconductors rather than mid-end ones. ASML’s CEO, Peter Wennink, stated that this rule would impact only a few Chinese foundries, allowing most other Chinese chip manufacturers to buy the DUV tool without restrictions. This distinction is significant, as it allows ASML to continue supplying equipment for mid-range semiconductor manufacturing.
The NXT:1980Di lithography equipment was originally designed for 38nm chip production. However, it possesses the capability to produce 14nm and 28nm chips through multiple exposures, achieving a yield of more than 90%. ASML refers to it as “a high-productivity, dual-stage immersion lithography tool” on their website, highlighting its versatility and productivity in semiconductor manufacturing.
The imposition of new restrictions by the United States on Chinese chip makers had an immediate market impact.
ASML’s Nasdaq-listed shares experienced a 4.17% decline on October 18, reflecting the uncertainties and challenges the company faces due to these regulatory changes.
This reaction underscores the significance of ASML’s role in the global semiconductor supply chain.
This development comes as part of a broader U.S. policy aimed at slowing down China’s technological and military advancements, a concern shared by many countries.
Read More: What are the Key Regulatory Changes by US in the Expanded Ban to China?
The Dutch Perspective on US Export rules
On Tuesday, a group of Dutch legislators questioned the Netherlands’ Trade Minister about the propriety of the U.S. unilaterally implementing new regulations governing the export of an additional chipmaking machine manufactured by ASML Holding to China.
During a parliamentary debate, Trade Minister Liesje Schreinemacher expressed that the Cabinet did not oppose the new U.S. rules impacting Europe’s largest tech company.
However, she emphasized the need to address this issue through a more European-oriented approach.
She mentioned having multiple discussions with fellow colleagues from different countries, including engagements with European Trade Commissioner Valdis Dombrovskis and Internal Market Commissioner Theirry Breton.
This perspective is based on a series of interactions between the Dutch government and the U.S., which have been ongoing since 2019 when the U.S. began pressuring the Netherlands not to export advanced machines to China.
A More Unified European Approach on US Export Rules
Minister Schreinemacher’s call for a coordinated approach within the European Union reflects a broader concern about the fragmented response to trade challenges within the EU. While the Netherlands has negotiated with the U.S. independently, there is growing consensus that the EU should present a united front in addressing trade regulations and technology exports.
Schreinemacher has revealed that discussions with other EU member states, including European Trade Commissioner Valdis Dombrovskis and Internal Market Commissioner Theirry Breton, have taken place. These discussions underline the need for the EU to work collectively to navigate the complex web of international trade agreements and regulations.
Read More: China to Challenge ASML with a better technology than EUV
ASML’s Response on US export rules
ASML, the company at the center of this debate, has stated its intention to comply with the new U.S. rules. It also believes that these restrictions will likely apply only to a limited number of Chinese plants capable of manufacturing advanced semiconductors. This measured response reflects ASML’s desire to continue serving its international customers while adapting to evolving global trade dynamics.
It’s important to note that, in the third quarter, shipments to China accounted for 46% of ASML’s total sales, highlighting the strategic importance of the Chinese market for the company.
“I don’t think we will see a peak this year, I think there will be a significant amount of demand coming out of China for mature technology,”
~ ASML Chief Executive Peter Wennick
Conclusion
The Dutch lawmakers’ challenge to the U.S. export restrictions on ASML’s chipmaking machines underscores the need for a more coordinated approach to international trade within the European Union.
In an increasingly interconnected global economy, addressing trade issues in a unified European manner will be critical in maintaining the stability of the tech industry and promoting the peaceful development of technology on a global scale.
The ongoing dialogue between the Netherlands, the U.S., and other European nations is a significant step in achieving this goal.
Reference:
Indian Express
