ASML, the top European chip equipment supplier has warned that the semiconductor supply chain will be disrupted if the US forces them to sell its mainstream equipment to China.
Should this succeed, this will blow Chinese efforts to become a world-class semiconductor product and will thwart the country's Made in China 2025 plan. ASML, being the largest maker of lithography tools that are used to make all kinds of chips can't sell its Extreme Ultraviolet (EUV) lithography equipment to Chinese clients.
The US proposes restrictions in which ASML will not be able to sell their mainstream Deep Ultraviolet (DUV) lithography tools to China as well, according to Bloomberg. DUV is a critical part as it is used to make a huge chunk of widely-used chips that can power PCs, mobile electronics, services, autonomous vehicles, and robots.
According to Peter Wennink, the CEO of ASML, "I think we need to realize that China is an important player in the semiconductor industry, especially not in the matured node, but also mainstream semiconductors. It is a very significant supplier of the global markets. So we just have to be careful what we're doing," according to Nikkei Asia.
He also said that the world can't ignore the fact that China has a chip manufacturing capacity that contributes to the global electronics market.
Also Read: ASML Accuses Chinese Tech Firm of Stealing Company Secrets | Engineer Behind IP Theft
Tension At An All-Time-High
The proposed ban intensifies tensions between Washington and Beijing that have brought ongoing discussions in the US about pressuring ASML against selling other mainstream equipment, such as the DUV. The Dutch foreign minister confirmed that the US and the Netherlands are currently in discussions about the matter.
ASML continues to argue that they are not the only maker of DUV scanners in the world as Canon and Nikon also provide similar equipment. However, if the US decides to leave China without its tools, other companies will not be able to replace them soon enough.
Additionally, American politicians argue that the advancements in modern chip packaging technologies will let Chinese companies design and produce sophisticated chips that can help with advancing Chinese supercomputing and military technologies.
It should also be noted that this proposed ban is not the only way the US can thwart the local chip industry. Many semiconductor fabs use many tools produced by other US companies and forbidding them to work with China will have a devastating effect.
Price Increase
Wennink hinted that his company will also likely raise the price of chip equipment because of the increase in labor, energy, and materials costs. He also said that his company is in discussion with suppliers and customers to find a way to share the burden of the rising costs.
Related Article: Chip Shortage is Expected to Cause Major Price Hikes on Gadgets and Other Tech Products
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Written by April Fowell
