The US chip embargo hits a key European company

ASML has invested $ 9 billion and many years of work in developing extreme ultraviolet (EUV) technology. It can “burn” electrical circuits with high concentration into silicon wafers. Chip manufacturers can get billions of transistors on a single chip and work with manufacturing processes of seven nanometers or less. ASML is the only company in the world that produces EUV and has far escaped Canon and Nikon. The most important chip companies in the world, Intel, TSMC and Samsung, buy from him.

ASML has a market value of $ 300 billion. The stock added almost 500 percent in five years. Last year, ASML had sales of 18.6 billion euros with a net profit of 5.9 billion euros. 6.3 billion euros came from the sale of EUV systems. Only 42 of these machines have been sold. They are extremely difficult to manufacture and contain one hundred thousand components. One such device costs $ 140 million. In 2023, a new generation of EUVs is expected to enter the market at a cost of $ 300 million.

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ASML has a number of suppliers from various countries, including the Czech Republic. For example, it takes top optical technologies from the Přerov company Meopta. ASML even praised Meopta for its professional cooperation and flawless deliveries. Meopta representatives did not want to comment on the embargo issues because they are bound by secrecy.

The administration of former US President Donald Trump imposed an embargo on EUV ASML machines. This is because ASML uses some US components, such as Cymer lasers. Trump’s successor, Joe Biden, continues this tactic.

“The Dutch government has succumbed to US pressure and is not giving us export licenses. We can at least supply older machines to China. They don’t care so much about Americans, they focus on the future, “a well-built ASML source told the E15 daily.

China is being pushed to become independent. Within fifteen years, they can create their own suppliers and the market for European companies will disappear, ”warned ASML CEO Peter Wennink. One of the alternatives to ASML being built is Shanghai Micro Electronics Equipment. “The semiconductor industry is frustrated with the US approach,” said Paul Triolo, an analyst who has been monitoring chips and technology China for a long time.

The Semiconductor Industry Association (SIA) says: “US rules are forcing China to look for alternatives. It may take time, but the trend of breaking dependence on US chip companies has started. ”SIA also points out that 75 percent of the chip’s production capacity, including component and chemical producers, is allocated in China and East Asia.

The European Commission is already responding to the situation. A few days ago, she organized a meeting of European chip leaders. “It is said that Europe needs to be more assertive in its interests. ASML is part of the EU’s strategic independence, “Radoslav Danilák, the director of the Slovak chip company Tachyum, told the E15 daily.

Geopolitical frictions are also an alarm for Taiwan, whose companies like TSMC control world chip production. President Tsai Ing-wen said a few days ago that Taiwan wanted to become self-sufficient in the production of chip production equipment. “I’m 100 percent sure we can do it,” she said.

China is exploring potential new practices that could revolutionize chips. For example, it focuses on optical chips that could work with light instead of electrons. “The frequency of today’s silicon processors is around 5 GHz. Optical chips could reach orders of magnitude higher. But we are still in the process of discovery, “said Bert Jan Offrein from the IBM Research laboratories in the E15 daily in Zurich.

ASML expects 20% year-on-year growth this year. Its current market dominance is also one of the causes of the global chip crisis. “We expect more demand than we can produce,” Wennink said in an interview with journalists and analysts.

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