ASML Hit by Block on Chinese Exports. What It Means for the U.S.-China Chip War.
ASML Holding, a key chip-equipment manufacturer, is facing new restrictions on Chinese exports, signaling that U.S.-led efforts to exert control over global chip-supply chains are gaining traction. The Netherlands-based company specializes in the production of lithography machines, which are essential for manufacturing semiconductors. ASML announced on Monday that the Dutch government recently partially revoked an export license for shipping NXT:2050i and NXT:2100i lithography systems to China, impacting a small group of customers.
Since September, the Dutch government has required permission for certain advanced types of chip-making equipment exports. These controls were implemented after the Netherlands, Japan, and the United States reached an agreement to restrict the export of chip-making equipment, aiming to limit China’s access to cutting-edge semiconductor technologies.
We do not expect the current revocation of our export license or the latest U.S. export control restrictions to have a material impact on our financial outlook for 2023, stated ASML in a press release.
ASML had previously stated that restrictions on exports to China would not affect its long-term targets for 2025 and 2030, but acknowledged that it would shift the regional balance of its sales. Pre-market trading data shows that ASML’s American depositary receipts dropped 2.3%, despite experiencing a 39% rise over the past year.
ASML has been prohibited from exporting its most advanced technology, known as extreme ultraviolet (EUV) lithography, to China since 2019. However, recent attention has been focused on the company’s sales of older deep ultraviolet (DUV) machines, following analysts’ suggestions that China utilized this technology to produce advanced chips for Huawei’s latest smartphones. The Dutch export restrictions specifically impact DUV machines.
These new restrictions indicate that U.S. allies are responding to the Biden administration’s efforts to curb China’s ability to advance its own chip-making industry, even through the utilization of older technologies.
The Chinese Ministry of Foreign Affairs has criticized the United States for imposing a technological blockade against China, calling it a generalized concept of national security. Ministry spokesperson Wang Wenbin expressed opposition during a daily press briefing, as reported by Chinese state media.
The impact of these restrictions on ASML remains to be seen. However, experts believe that this development highlights the intensifying U.S.-China chip war and the determination of the United States to limit China’s technological advancements. The outcome of this ongoing battle will undoubtedly shape the global landscape for semiconductor supply chains, with far-reaching consequences for various industries and economies worldwide.
In conclusion, ASML’s recent setback in exporting chip-making equipment to China signifies a significant development in the U.S.-China chip war. The restrictions imposed by the Dutch government indicate that U.S.-led efforts to limit China’s access to advanced semiconductor technologies are making progress. As the battle continues, the repercussions will be felt across multiple industries, underscoring the critical importance of the global semiconductor supply chain.
