Netherlands Blocks ASML From Exporting Some Chipmaking Tools to China After US Export Restrictions

The Netherlands has taken measures to revoke an export license for ASML, a leading global manufacturer of chipmaking equipment, which restricts the shipment of some of its equipment to China.

According to Reuters, the decision comes in response to US export restrictions imposed on ASML. The company, headquartered in Veldhoven, Netherlands, said Monday that the export license revocation affected shipments that included some lithography systems, which are used to improve the chipmaking process.

The firm noted that the license for "the shipment of NXT:2050i and NXT:2100i lithography systems in 2023 has recently been partially revoked by the Dutch government, impacting a small number of customers in China."

Crucial Market for ASML

ASML holds a dominant position in the market for lithography systems, utilizing lasers to facilitate the creation of chip circuitry. Despite the recent export restrictions, ASML said it does not anticipate any significant financial impact on its outlook for 2023.

The company remains committed to complying with all relevant laws and regulations, including export control legislation in its operating countries. China has emerged as a crucial market for ASML, ranking as its third-largest after Taiwan and South Korea in recent years.

However, in the third quarter of 2023, China became the largest market for ASML, accounting for 46% of the company's sales. The shift in market dynamics underscores the strategic importance of the Chinese market for ASML.

The export restrictions imposed by the United States in 2023 included new rules granting Washington the authority to limit the export of ASML's "Twinscan NXT1930Di" machine if it contained any US components.

This move prompted scrutiny from Dutch lawmakers, who questioned the Netherlands' Trade Minister about the unilateral imposition of rules by the US governing the export of another ASML chipmaking machine to China.

ASML's Discussions With the US

ASML, in response to the export control regulations, engaged in discussions with the US government to gain further clarity on the scope and impact of these regulations.

The semiconductor equipment maker emphasized its commitment to adhering to all applicable laws and regulations, emphasizing compliance with export control legislation in the countries where it conducts its operations.

"In recent discussions with the US government, ASML has obtained further clarification of the scope and impact of the US export control regulations," the company said in a statement.

"ASML is fully committed to comply with all applicable laws and regulations including export control legislation in the countries in which we operate," it added.

According to Reuters, China has been trying to catch up in lithography as part of a directed effort by its government to create a self-reliant semiconductor supply chain. The nation's only known maker of lithography machines is Shanghai Micro Electronics Equipment (SMEE), but it is reportedly well behind ASML and Japanese peers.