Underneath strain from the USA, the Netherlands restricts the export of semiconductor machines

An employee stands by cables in an ASML Twinscan XT1000 lithography machine during manufacture at the ASML facility in Veldhoven, the Netherlands.

Bloomberg | Bloomberg | Getty Images

“Given the technological developments and the geopolitical context, the government has concluded that the existing export control framework for certain equipment used in the manufacture of semiconductors needs to be expanded in the interest of national and international security,” said the State Department of the Trade Minister Liesje Schreinemacher announced this in a letter to Parliament on Wednesday.

Although the letter does not refer to China, it comes after pressure from the White House, which imposed export controls in 2022 restricting Beijing’s access to certain semiconductor chips. At the time, US officials recognized that unless other countries imposed similar restrictions, export controls would become less effective over time.

Since 2018, the US has reportedly been asking the Dutch government to block ASML from shipping its extreme ultraviolet lithography machines to China. ASML has not yet shipped the equipment to China.

Following the Dutch government’s announcement, ASML said in a statement that “it will take some time for these controls to be enacted into law and come into effect”.

“Based on today’s announcement, our expectation of the Dutch government’s licensing policy and the current market situation, we do not expect these measures to have a material impact on our financial outlook,” the company said on Wednesday, adding that “the additional export controls do not apply to all immersions.” -lithography tools, but only on what is described as “most advanced”.

ASML said it’s not clear what the Dutch government means by the “most advanced” machines.

But the regulations mean the company must apply for a license to export its so-called immersion deep ultraviolet (DUV) lithography machine, which is used to make memory chips. These chips are used in a variety of devices, from smartphones to laptops to servers, and could ultimately be used for artificial intelligence applications.

Last month, ASML said a former employee in China misused data related to its proprietary technology.

China has been working to bolster its domestic semiconductor industry but lags far behind Taiwan, South Korea and the US

China’s foreign ministry on Thursday said it rejects the politicization of economic and trade cooperation and hopes the Netherlands will maintain an objective stance, according to Reuters.

Anna Rosenberg, head of geopolitics at the Amundi Institute, told CNBC’s Street Signs on Thursday that the recent announcement from the Netherlands was “a big deal” for President Joe Biden.

“The US has been trying to get the EU on the side of their policy towards China for some time, and they now have significantly more influence over the EU than before [Ukraine] war, simply because the EU is now pretty completely dependent on the US for its security,” she added.