Netherlands to limit China’s hold on chip-making equipment – News

Prime Minister Dick Schoof’s Dutch government is unlikely to renew some ASML service licenses and spare parts in China after they expire at the end of this year, they said. Bloomberg anonymous sources familiar with the matter.

The decision is expected to apply specifically to ASML’s Deep Ultraviolet (DUV) Lithography machines, which are sold together with the maintenance services necessary to operate these machines. If this support is cancelled, at least some of these devices will be inoperable from next year.

The Dutch government’s decision comes after some pressure from the United States, which itself banned the export of modern chips to China. But the US is also pressuring its Western partners to join the restrictions against China in the semiconductor industry. Apart from the US and the Netherlands, Japan and South Korea are the most important countries for chip manufacturing facilities.

Without DUV ASML equipment, it will be more difficult for Chinese tech giant Huawei or its partner SMIC to achieve technological breakthroughs, as Chinese engineers cannot reproduce these advanced lithography systems. In addition, the country is already two generations behind industry leader TSMC in chip production.

On the other hand, the Dutch decision is likely to have a negative impact on ASML’s sales, around half of which come from China.

Maintenance of DUVs and other similar lithographic equipment is essential in the day-to-day operations of a chip manufacturing plant. It is so important that the suppliers of these tools, whether ASML or American Applied Materials, send their own engineers to the production lines to help solve problems in real time.

Getting spare parts is not that important. The inability to repair the broken devices, especially ASML lithography systems, means that the chip maker will likely have to cut production, Bloomberg said.