In a significant development, ASML Holding is set to encounter additional export restrictions concerning the shipment of advanced deep ultraviolet (DUV) lithography systems to China. The Dutch government is preparing to announce a fresh set of export controls that will impose limitations on ASML’s chipmaking machines being sent to China. Under the forthcoming measures, ASML will be required to obtain export licenses for the aforementioned systems.
These stringent regulations, expected to be unveiled next week, signify a notable shift in trade dynamics and may have far-reaching implications for the semiconductor industry. ASML, a prominent player in the chipmaking sector, will likely face challenges and adjustments to comply with the new regulations as it navigates the intricate landscape of global trade. The move reflects heightened scrutiny on technology transfers and underscores the increasing complexities surrounding international trade relations in the tech sector.
ASML, the largest technology firm in Europe based on market capitalization, made significant sales in China, accounting for 14% of its total sales in 2022. Over the past decade, ASML has successfully sold chip lithography equipment worth more than 8 billion euros ($8.46 billion) to Chinese buyers. When companies purchase ASML machines, they also enter into service agreements to ensure ongoing maintenance. The “installed base” segment, comprising these service agreements, contributed approximately 25% to ASML’s global revenue in 2022.
ASML’s machines, valued at tens of millions of euros each, play a crucial role in the chip manufacturing process, enabling the creation of circuits. These machines require unique components and regular maintenance to ensure their operational efficiency and effectiveness in producing high-quality chips. The combination of substantial sales in China and the importance of continuous maintenance agreements highlight the significance of the Chinese market and the vital role ASML’s equipment plays in the semiconductor industry.
The US administration, under President Joe Biden, has been urging the Netherlands and other nations to aid in limiting China’s progress in developing its chip industry, bolstering its military capabilities, and advancing technologies like artificial intelligence and quantum computing. To this end, the US has implemented significant export restrictions on advanced semiconductors and chip-making technologies destined for Chinese companies. In January, Dutch and Japanese officials tentatively agreed to support the US initiative, leveraging their expertise as the world’s leading sources of machinery for producing advanced semiconductors.
What is the primary focus of ASML’s operations?
ASML is a leading innovator in the semiconductor industry, offering comprehensive solutions for chipmakers to achieve high-volume production of patterns on silicon through lithography. With a holistic lithography product portfolio, ASML drives the affordable scaling that fuels the semiconductor industry. Their lithography systems encompass both EUV (Extreme Ultraviolet) and DUV (Deep Ultraviolet) systems, delivering advanced capabilities for precise chip manufacturing. ASML also provides refurbished systems, ensuring cost-effective options for customers. Their metrology and inspection systems offer speed and accuracy, catering to every stage of the manufacturing process from research and development to mass production. Additionally, ASML’s computational lithography expertise further enhances its offerings, enabling efficient and optimized chip production. With its comprehensive range of hardware, software, and services, ASML remains at the forefront of global innovation, supporting the semiconductor industry’s evolving needs.
Related:
- ASML claims Ex Chinese Employee stole Data on Lithography Technology
- China’s Chip Industry Faces Obstacles as Japan Implements Major Export Controls
- Increasing Sanctions on Semiconductor Exports to China may Backfire: ASML Chief
(via)
