US-China chip war leads to restrictions on ASML exports

Following an order by the Dutch government, ASML — the world’s leading manufacturer of high-end chipmaking equipment — will curb shipments of two of its machines to China.

Specifically, the government has partially revoked the export licence of the NXT:2050i and NXT:2100i lithography systems, the company said in a statement. Much like its other products, the two lithography machines use light to print blueprints of patterns.

The Veldhoven-based company has already been prohibited from selling its most sophisticated machines to China since 2019. In September 2023, following months of pressure by the US, the Netherlands also introduced stricter export controls citing “national security interests.”

Meanwhile in October, Washington updated its export restrictions to include ASML’s TWinscan NXT1930Di machine — if it contains American-made components. This requires the company to apply for a US licence even though Dutch regulations allow exports of the product to China.

In its statement on Monday, ASML said that neither the US controls nor the Netherlands’ latest revocation will have a “material impact” on the company’s financial outlook for 2023. However, it added that the Dutch restrictions will affect a small number of Chinese customers.

In response to the measures, China’s foreign ministry spokesperson Wang Wenbin urged the Dutch government to respect market principles, protect the common interests of the two countries, and ensure the stability of international supply chains.

Chips at the centre of geopolitical power plays

With semiconductor chips emerging as the hottest commodity in the global race for technological supremacy, the world’s  economic superpowers are fighting to get the bigger piece of the cake.

The rivalry is more intense between the US and China, with the former implementing sweeping export measures and a clear decoupling strategy to cripple Beijing’s ambitions to boost its domestic capacity of high-end chip production.

Although the EU has been publicly pursuing a de-risking approach, commissioner Thierry Breton has stressed the union’s commitment to support the US goal of constraining China’s semiconductor industry.

“We cannot allow China to access the most advanced technology in semiconductors, quantum, cloud, edge, AI, connectivity, and so on,” he said during a speech last year.

It remains to be seen how the Netherlands’ latest restrictions on ASML’s machines will impact relations with China and, in turn, further shift what looks like an escalating chip war. But despite what the global aspirations for chip sovereignty might be, experts argue that neither the EU, nor the US or China — or anybody else for that matter — have any chance for semiconductor independence.