The US government is putting enormous pressure on the Netherlands in order to stop key suppliers to the chip industry from supplying machines to China. The US wants China to stop making further advances in chip production.
As the US Economic Department Bloomberg According reports, several American politicians are trying to prevent the Netherlands from selling chip production technology to ASML, the world’s market leader. This is also known as deep ultraviolet lithography (or DUV) systems.
The ban on the latest generation of machines was already in place and older systems will be followed.
The lithography systems are used for silicon wafers that have microscopic structures. ASML should not supply these systems to China. They are outdated systems, but they are widely used for simpler chips.
The American politicians’ efforts to influence the Netherlands will make it much harder for Chinese chip makers to expand their manufacturing capabilities and build newer chips. ASML will likely lose between five and ten percent of its sales, as the company has primarily done business with non-Chinese chip manufacturers. The situation for SMIC, the largest Chinese chip manufacturer, and similar companies from China is likely to worsen.
ASML is currently being prevented by the Dutch authorities from selling its ultraviolet lithography systems, state-of the-art, to China. They have not granted the necessary licenses. China’s government has responded with extreme sniggering and annoyance to US reports about a crackdown on the export of old-generation manufacturing technology. A State Department spokesperson claimed that the US had attempted to impose a blockade, politicize, weaponize, and ideologically tax economic problems in order to implement its agenda.