February 8, 2023

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'Netherlands forced to choose between China and US'

‘Netherlands forced to choose between China and US’

InternationalDec 8 ’22 at 4:59 PMAuthor of the book: Remy Cook

Hack is working hard on new trade rules that would further restrict the export of chip technology to China. The rules may also coincide with U.S. efforts to exclude China from certain technologies. While this may not seem voluntary, Paul Verhagen, an expert on high-tech competition at The Hague Center for Strategic Studies, thinks so.

A computer chip. (Umberto/Unsplash)

“It probably means you’re fighting for the Americans and you’re really being pushed into this conflict between China and the United States,” Verhagen said. ‘So we are no longer allowed to sell ASML machines to China. That means less turnover for ASML, less R&D for ASML, and more dependence on the US.’

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As bitter as it may sound, Verhagen argues that this is the ‘hard truth’ from a geopolitical point of view. “In geopolitics you really only have the United States, and they’ve been doing these sanctions since 2018,” he continues. “They’re a superpower, and if they decide they want to do something, it’s good or bad. It’s still a little bit mean, but if they really wanted to, the Americans could destroy the entire supply chain.

together with

Verhagen insists that the decision was largely made in conjunction with ASML. ASML and the US are not strategic rivals. In this case they want to face an adversary together – in this case China,’ says Verhagen. “It is difficult for ASML not to sell products to China because a large part of their revenue comes from there. So Americans now have to find a way to fill that gap.’

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He thinks the deal also covers the fact that ASML can offer more to the US. “For example, new TSMC factories are being built in Arizona, which will undoubtedly have ASML machines. So that supply chain is now being shifted from Asia to the US. It needs ASML machines, so maybe they got something out of that.’

effect

Looking at the effect of the trade ban, Verhagen might conclude that China is actually suffering the most. “The Chinese economy is largely set up to integrate into the global economy and produce goods cheaply,” he continues. ‘If they don’t get Western advanced technology, they have to develop it themselves. It is not easy because it requires resources, money and knowledge. That knowledge is mainly in the West. Of course there are many PhDs and students in China, but ultimately they go through Western institutions. So it is very difficult.

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