2 weeks Ago
ASML may see further restrictions on its operations in the important China market as the Dutch government is mulling not renewing crucial licenses, Bloomberg reports. Netherlands-based ASML makes some of the world’s most advanced chipmaking equipment. The government is likely to restrict the company’s ability to repair and provide spare parts for its installed advanced semiconductor equipment in China, potentially severely disrupting Chinese chipmaker SMIC’s ability to produce chips on its 7nm and 5nm process technologies.
The move will also hit ASML’s sales, nearly half of which comes from China. These licenses are due to expire at the end of this year. ASML’s deep ultraviolet lithography (DUV) machines are critical to the growth of higher-end chips.
The Dutch government has already restricted DUV machine exports to China. Once the service support is removed, the impacted ASML equipment will become inoperable from 2025. The US has been pressurizing allies like the Netherlands and Japan to prevent China from accessing advanced chipmaking tools, and align their export controls with US policies.
China has not yet developed technology similar to ASML’s DUV technology. The restrictions, once they come into effect, could hurt Chinese tech giant Huawei and its partner SMIC. The US is believed to be considering tougher trade rules if allies continue selling advanced chip technology to China.
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