ASML terminates contracts to supply chip manufacturing equipment to China at the request of the United States
According to Bloomberg, on instructions from the White House, ASML has canceled several contracts with Chinese firms to supply equipment for the manufacture of state-of-the-art chips ahead of schedule. These measures are part of a broader US campaign against the development of the Chinese semiconductor industry, as a new package of sanctions is due to take effect in January 2024. The equipment was supposed to be shipped by the set date, but a call from the Biden administration prevented it.
According to an anonymous source, US National Security Advisor Jake Sullivan held talks with the Dutch government late last year to prevent the supply of immersion deep ultraviolet lithography systems to China. However, Dutch officials asked the United States to contact ASML directly, thus avoiding confrontation with Chinese representatives. These systems are critical for the production of high-tech chips (DUV, 193 nm wavelength).
ASML, the only manufacturer of equipment for extreme ultraviolet lithography (EUV), has previously faced restrictions on the supply of its products to China. Lithographic scanners for the production of EUV semiconductors with a wavelength of 13.5 nm were banned from being shipped to China about two years ago. Such restrictions could deal a blow to China’s semiconductor industry, which is striving for self-sufficiency and independence.
However, this did not prevent Chinese manufacturers from launching the production of 7-nm chips and continuing to improve their technical processes. In particular, last year, the Chinese company Huawei Technologies Co. has released a smartphone that competes with Apple Inc.’s iPhone. using state-of-the-art chips made on ASML immersion lithography machines, Bloomberg News reports.
According to the Chinese customs, from July to November, imports of lithography machines to China increased more than fivefold to $3.7 billion. China accounted for almost half of ASML’s sales in the third quarter, up from 24% in the previous quarter and 8% in the three months ended March, as Chinese companies rushed to import machines before export controls and sanctions came into effect.
ASML said that the cancellation of contracts with Chinese buyers will not have a significant impact on its revenues, as it is only a small amount of equipment. Nevertheless, this incident reflects the growing geopolitical tensions in the field of technology and global supply.
The Chinese side views these actions as a manifestation of “hegemony” and calls on the Netherlands to abide by the spirit of the treaty and international order.
ASML Holding NV is the only company in the world that produces unique equipment for manufacturing the most advanced semiconductors. This equipment, in particular, includes extreme ultraviolet lithography (EUV) systems, which are key to creating modern high-tech chips. Thanks to its unique technologies, ASML holds an important position in the global semiconductor supply chain, playing an indispensable role in the production of components that underpin modern technology, from smartphones to advanced national security equipment.
