Key Points
- Netherlands introduces export restrictions: The Dutch government has announced new rules requiring companies to obtain licenses for exporting advanced semiconductor manufacturing equipment.
- ASML, a crucial player in advanced chip production: ASML plays a critical role in producing machinery essential for manufacturing advanced chips.
- China’s response and potential trade implications: China’s embassy in the Netherlands has criticized the new export control measures, highlighting concerns about disruptions to free trade and international trade rules.
The Netherlands has announced new export restrictions on advanced semiconductor equipment, responding to pressure from the United States to limit China’s access to crucial chipmaking tools. Starting from September 1, Dutch companies will be required to obtain a license before exporting certain advanced semiconductor manufacturing equipment. The Netherlands is home to ASML, a leading semiconductor company that produces machinery essential for manufacturing advanced chips.
The United States had previously implemented comprehensive rules in October, aiming to curtail exports of vital chips and semiconductor tools to China. This move was seen as a potential setback to Beijing’s ambitions to strengthen its domestic technology capabilities. Since then, the US has been increasing pressure on key chip-producing nations and allies, including the Netherlands and Japan, to introduce their own export restrictions. Given ASML’s critical role in advanced chip manufacturing, the US has sought the Netherlands’ support. While the Dutch government was initially undecided, it outlined export restrictions on advanced semiconductor equipment in March. The recent announcement finalizes these rules and provides more clarity regarding permissible exports.
The Dutch government’s legislation does not specifically target any country or mention ASML by name. It covers a “number of very specific technologies for the development and manufacture of advanced semiconductors” that may have potential military applications. The intention behind the rules is to safeguard national security. Dutch Trade Minister Liesje Schreinemacher emphasized the importance of providing impacted companies with clarity, enabling them to adapt to the new regulations within the allocated timeframe.
ASML finds itself caught in the middle of this situation. Its machines are utilized by leading chip manufacturers such as Taiwan Semiconductor Manufacturing Co (TSMC). The company produces two key tools: the immersion deep ultraviolet (DUV) lithography machine for memory chip production and the extreme ultraviolet (EUV) lithography machine for more advanced chip fabrication. ASML will now be required to apply for export licenses for its most advanced immersion DUV lithography systems, including the TWINSCAN NXT:2000i and subsequent tools. The Dutch government has been applying different export restrictions to ASML’s EUV machines since 2018, but these will now fall under the new law taking effect in September.
ASML confirmed that it can begin submitting export license applications prior to the law’s implementation, with the government evaluating these requests on a case-by-case basis.
China has responded to the Dutch government’s actions, criticizing them as an abuse of export control measures that disrupt free trade and international trade rules. The Chinese Embassy in the Netherlands called on the Dutch side to correct what it perceives as wrongful actions and emphasized the importance of safeguarding international trade rules and bilateral economic cooperation. The embassy expressed readiness to work with the Netherlands to address the issue and promote the healthy development of Sino-Dutch economic and trade relations based on mutual benefit.
About ASML
ASML Holding N.V. (Euronext: ASML, NASDAQ: ASML) is a holding company based in the Netherlands. The Company operates through its subsidiaries in the Netherlands, the United States, Italy, France, Germany, the United Kingdom, Ireland, Belgium, South Korea, Taiwan, Singapore, China, Hong Kong, Japan, Malaysia and Israel. The Company operates through one business segment which is engage in development, production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems, consisting of lithography, metrology and inspection systems. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems). To learn more, visit www.asml.com
About TSMC
Taiwan Semiconductor Manufacturing Co Ltd (TWSE: 2330, NYSE: TSM) is a Taiwan-based company mainly engaged in the provision of integrated circuit manufacturing services. The integrated circuit manufacturing services include process technology, special process technology, design ecosystem support, mask technology, 3DFabricTM advanced packaging and silicon stacking technology services. The Company has completed the transfer and mass production of 5nm technology, and is engaged in the research and development of 3nm process technology and 2nm process technology. The product application range covers the entire electronic application industry, including personal computers and peripheral products, information application products, wired and wireless communication system products, servers and data centers. To learn more, visit www.tsmc.com
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