The Dutch government has partially revoked an export license for semiconductor equipment giant ASML (Advanced Semiconductor Materials Lithography) to ship some of its most advanced lithography machines to China, report Reuters.
The canceled export license affects ASML’s NXT:2050i and NXT:2100i systems. It comes after the European tech giant received “further clarification of the scope and impact” of expanded US export rules aimed at limiting China’s domestic chipmaking capabilities.
ASML stock price dips
ASML’s stock dipped 1.54% to 671.20 euros on the news, kicking off 2024 on a sour note on the first trading day of the new year.
While the license cancelation won’t have a “material impact” on ASML’s 2023 earnings, the company did not disclose the specific financial implications. It also remains unclear exactly how many lithography machines will be affected.
ASML’s most advanced extreme ultraviolet (EUV) lithography systems have required a Dutch export license since September 2023 due to US government pressure. These advanced machines are crucial for producing leading-edge chips below 10 nanometers.
China claims discrimination
China was quick to criticize the Netherlands’ decision, with Foreign Ministry spokesman Wang Wenbin stating Beijing hopes the Dutch government will “protect the common interests of both countries and their companies and maintain the stability of international supply chains”.
The official X account for The Chinese Communist Party’s Ministry of Foreign Affairs urged the Netherlands to “uphold fairness & market principles.”
We urge the Netherlands to uphold fairness & market principles, respect the spirit of contract and take concrete actions to protect the common interests of our two countries and of Chinese & Dutch companies and keep international industrial & supply chains stable. #ASML pic.twitter.com/wI3ai8I5Cr
— Spokesperson发言人办公室 (@MFA_China) January 2, 2024
Asia’s biggest economy was ASML’s third-largest market after Taiwan and South Korea in 2022. However, during Q3 2023, China accounted for a whopping 46% of ASML’s total revenue – making it the company’s largest market. Broader tensions have been rising due to US-spearheaded efforts to constrain China’s semiconductor industry through export controls and Beijing has been investing billions to foster its domestic chip capabilities but still lags years behind cutting-edge manufacturing.
Countries have been reluctant to export their most advanced semiconductor technology to China due to rising national security concerns, fears of enabling its military capabilities, and a brewing technology cold war with the US. With chips becoming critical infrastructure for military systems and emerging technologies like AI, Western nations are increasingly wary of strengthening Beijing’s capabilities and economic competitiveness in strategic fields.