ASML forced to suspend some China exports after US escalates tech battle

ASML has been ordered by the Dutch government to restrict shipment of some of its chip-making equipment to China, the company said on Monday.

The curb comes after the United States ramped up its own restrictions on the types of semiconductors that American companies will be able to sell to China and also pressed its allies to enact their own.

ASML, a maker of semiconductor production equipment based in the town of Veldhoven in 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 the decision would impact “a small number of customers in China.”

ASML is known for its prowess in making lithography machines, which use light to print patterns on silicon. That step is crucial in the mass production of microchips, which power everything from phones to washing machines.

Because of its dominance in the market, ASML has been cited by experts as a bellwether of the growing rift between China and the West over access to advanced technology.

For several years, the Dutch government has faced pressure from the United States to limit chip-related exports to China.

In October, the Biden administration unveiled new rules that further expand on a sweeping set of export controls first introduced in 2022. ASML said when the rules were updated that due to “the length and complexity of the regulations, ASML will need to carefully assess any potential implications.”

The updated export restrictions would affect between 10% and 15% of the firm’s sales to China, ASML Chief Executive Peter Wennink said during an earnings call in October.

In its statement on Monday, the company said after discussions with the US government, it has “has obtained further clarification of the scope and impact of the US export control regulations.”

But it 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,” ASML added.

China reacted on Tuesday, by calling the US curbs “hegemonic” and “bullying.”

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

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