US alliance wants to cut China off from chip supply.
The U.S. wants to prevent China from catching up with leading manufacturers such as Taiwan’s TSMC in the chip technology sector. To that end, a package of measures was passed last October that restricts China’s ability to buy chips made with U.S. equipment and technology. There were initial indications in mid-December that Japan and the Netherlands might also join in the export controls, and a decision could now be made as early as this Friday. This is according to Bloomberg (paywall), citing well-informed circles.
The Netherlands is home to one of the semiconductor industry’s most important companies, ASML. The group, based in the south of the country, makes lithography systems that are essential for the production of advanced chips. Export restrictions could make it impossible to build production lines for high-tech components in China, Bloomberg adds. At the same time, the latest generation of ASML’s technology has not had an export permit to the Asian country since 2018, so it is likely to be a previous generation that would not be allowed to ship in the future, according to DigiTimes.
For ASML, new requirements would be a blow to the bottom line, as business with China contributes about one-seventh of total sales, German newspaper Frankfurter Allgemeine Zeitung recently wrote. ASML CEO Peter Wennink also told Bloomberg News that the measures could ultimately lead to China pushing its own development of the necessary technologies. This will take some time, but the country is likely to be successful.