‘Deal US and the Netherlands on restricting ASML chip machines to China’

ANP

NOS Nieuws•vandaag, 20:45

The United States and the Netherlands have reached an agreement on limiting the sale of ASML chip machines to China, Bloomberg news agency reports.

The exact content of the agreements on the technology of the Dutch company remains secret due to the sensitivity of the matter. It could be months before a final agreement is reached.

Today, talks were held in Washington between the Americans, officials of the Dutch Minister for Foreign Trade and Development Cooperation, Schreinemacher, and Japan, which also sells chip machines to China.

Chipmachines

The sale of high-tech chip machines from ASML in Veldhoven to China has been a complicated issue for years. It is feared that the advanced chips will be used in Chinese defense equipment. The very latest chip machines are currently not allowed to be exported to China, older types are.

The United States is now stepping up the pressure to convince the Netherlands to impose a more extensive export ban to China. This would also limit the sale of those older machines. The Americans want to counter the rapid development by the Chinese of modern technology that can be used for military purposes.

Which machines are at stake?

Since 2019, the company has been subject to a de facto ban on the sale of the very latest machines to China (EUV, Extreme Ultaviolet). But ASML has been selling so-called DUV machines (Deep Ultraviolet) to China for years, with which a large number of different chips can be made. This type of machine can be seen as the ‘workhorse’ of the company.

No license is now required for export and the chip machine maker does not know what its customers use the machines for. DUV covers a large number of machine types, from models intended for the production of fairly simple chips to more advanced chips.

These machines are indispensable for China’s chip production. In 2021, this will generate a turnover of 2.7 billion euros for ASML, 15 percent of the total turnover.

Almost two weeks ago, US President Biden asked Prime Minister Rutte in a conversation at the White House for more cooperation from the Dutch side in the approach advocated by the Americans.

Bang

Rutte said afterwards that the request to no longer issue an export license “was not so black and white”, but he did not further address the thorny issue. The Dutch government is afraid that a major export ban to China will have negative consequences for the entire chip industry.

Furthermore, the sale of the popular and extremely expensive chip machines for the successful ASML generates about 2.7 billion euros annually, which is good for 15 percent of the annual turnover.

Minister Schreinemacher, responsible for whether or not to grant an export license for ASML technology, said today that the Netherlands will not do exactly what the Americans want. “We don’t sign at the cross”. It will take months before it becomes clear exactly what the export ban entails.

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