Netherlands to limit exports of semiconductor machines after US pressure
- The Netherlands has become embroiled in political tensions between the US and China, with the former wanting to ensure that the most advanced chip technology is not used by Beijing.
- Dutch Foreign Trade Minister Liesje Schreinemacher said that “the existing export control framework for specific equipment used in the production of semiconductors needs to be extended, for reasons of national and international security.”
- China has worked to strengthen its domestic semiconductor industry, but it remains far behind the likes of Taiwan, South Korea and the US
An employee stands by cables inside an ASML Twinscan XT1000 lithography machine, during production at the ASML factory in Veldhoven, the Netherlands.
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“Given the technological development and the geopolitical context, the government has come to the conclusion that the existing export control framework for specific equipment used in the production of semiconductors needs to be expanded, for reasons of national and international security,” says the country’s foreign minister. Trade Minister Liesje Schreinemacher said so in a letter to parliament on Wednesday.
Although the letter does not refer to China, it comes after pressure from the White House, which in 2022 imposed export controls restricting Beijing from accessing certain semiconductor chips. At the time, US officials recognized that if other countries did not impose similar restrictions, export controls would lose effectiveness over time.
Since 2018, the United States has reportedly asked the Dutch government to stop ASML from sending its extreme ultraviolet lithography machines to China. ASML has so far not sent the equipment to China.
In the wake of the Dutch government’s announcement, ASML said in a statement that “it will take time for these controls to be translated into legislation 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 effect on our financial outlook,” the company said on Wednesday, adding that “additional export controls do not apply to all immersion lithography tools, but only the so-called ‘most advanced’.”
ASML said it is not clear what the Dutch government means by the “most advanced” machines.
However, it said the regulations mean it must apply for a license to export its so-called immersion deep ultraviolet (DUV) lithography machine, which is used to produce memory chips. These chips are used in a multitude of devices, from smartphones to laptops and servers, and may eventually be used for artificial intelligence applications.
Last month, ASML said a former employee in China had misused data related to its proprietary technology.
China has worked to strengthen its domestic semiconductor industry, but it remains far behind the likes of Taiwan, South Korea and the US
The Chinese Foreign Ministry said on Thursday that it opposes the politicization of economic and trade cooperation and hopes that 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 latest announcement from the Netherlands is “a big deal” for President Joe Biden.
“The US has been trying to get the EU to side with its policy towards China for some time, and it has significantly more influence on the EU now than before [Ukraine] war, simply because the EU is now almost completely dependent for its security on the US,” she added.