It’s been up in the air for a while, and it finally came out last week: ASML is no longer allowed to supply certain chip machines to China. That makes Europe’s biggest tech company the center of a global fight between the two superpowers. More countries will follow in the future, especially from Asia.
The news should not have come as a surprise at ASML’s head office in Veldhoven. The fact that advanced chip technology ends up in Chinese hands has long been a thorn in America’s side. That is why strict export controls are imminent.
The final cabinet plans were released last Thursday. Starting this summer, it says companies will need permission to supply certain chip machines to some other countries.
In doing so, the Cabinet deliberately did not mention both ASML and China by name. But in practice, ASML is no longer the most advanced version of DUV engines (Deep ultra violet) to China.
The Netherlands is not the only country to impose restrictions on itself. Japan and South Korea, among others, have specialized chip companies and may introduce restrictions.
The US fears that the Chinese will copy technology from ASML and its competitors and use it for military purposes. So US President Joe Biden has recently put considerable pressure on the Dutch cabinet to impose export restrictions.
ASML is in the geopolitical firing line
This puts both the Cabinet and ASML in the middle of a geopolitical battle between the world’s two largest economies. China and the US see each other as threats and relations between the two countries have deteriorated rapidly in recent years.
Former US President Donald Trump launched a trade war against the Chinese. He introduced numerous import tariffs on Chinese products, after which the Asian country decided to impose tariffs on American goods. A technology war has also erupted, in which the US wants to contain China’s growth as much as possible.
It has already ensured that ASML has its state-of-the-art machinery – EUV variation (Ultraviolet) – is no longer allowed to deliver to China. Meanwhile, Trump had to make way for Biden in the White House. But it continues to take a hard line against China.
Biden and Rutte spoke in Washington
Earlier this year, Prime Minister Mark Rutte and Minister Wopke Hoekstra (Foreign Affairs) visited the US. During their meeting with Biden, they talked about the ASML issue. Rutte did not say what exactly was discussed. But two months later, the cabinet came up with the ban.
Welldoven said last Thursday that the financial consequences of the new policy were not too dire. “We do not expect these measures to have much of an impact on financial expectations for 2023,” ASML said in a statement. Declaration.
This is because the company produces many types of machines, some of which are still allowed to be sold to China. It also trades with other countries. The latest annual report shows that the order book at ASML is higher than ever.
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