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Netherlands-based ASML ASML makes some of the world’s most advanced chipmaking equipment — and it could soon lose access to business in one of its most important markets.
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The Dutch government under Prime Minister Dick Schoof reportedly does not plan to renew certain licenses at the end of the year for ASML ASML to repair machines and provide spare parts for customers in China. This is expected to impact ASML’s deep ultraviolet lithography, or DUV, machines, Bloomberg reported, citing unnamed people familiar with the matter. The company’s advanced chipmaking machines come with maintenance agreements to keep them operating, and limiting ASML’s ability to repair the machines could leave some of them unable to run by next year, according to Bloomberg.
China-based Huawei and Semiconductor Manufacturing International Corp. (SMIC) depend on ASML’s DUV lithography machines to make advanced chips. Nearly half of ASML’s revenue for the second-quarter came from sales to China, Bloomberg reported. The country has been unable to build a similar version of ASML’s equipment, and China cannot buy ASML’s extreme ultraviolet, or EUV, machines, which are used to make the world’s most advanced chips used by Nvidia NVDA and Apple AAPL.
Under previous Dutch Prime Minister Mark Rutte, the Netherlands did not strongly comply with U.S. requests to increase trade restrictions on China, but Schoof told Bloomberg his government has “good negotiations” with the U.S. and Japan over export controls. The Dutch Ministry of Foreign Affairs and ASML both declined to comment.
Meanwhile, the U.S. is reportedly considering tougher trade rules if allies, including the Netherlands and Japan, continue selling chip tech to China. The Biden administration is reportedly debating using an export control called the foreign direct product rule, which does not allow the export of any good to any country if it is manufactured with a certain percentage of U.S. intellectual property components.
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Source : Quartz