Tough stance: A South Korean delegation, including president Yoon Suk Yeol, on a visit to the ASML factory in Veldhoven, Holland. The Dutch company has cancelled shipments of some of its machines to China at the request of the United States. — Reuters
NEW YORK: ASML Holding NV cancelled shipments of some of its machines to China at the request of US President Joe Biden’s administration, weeks before export bans on the high-end chipmaking equipment came into effect, people familiar with the matter say.
The Dutch manufacturer had licences to ship three top-of-the-line deep ultraviolet lithography machines to Chinese firms until January, when new Dutch restrictions took full effect.
However, US officials reached out to ASML to ask them to immediately halt pre-scheduled shipments of some of the machines to Chinese customers, according to people familiar with the matter, who asked not to be identified because the discussions were confidential.
Biden is cracking down on Beijing’s attempts to create its own advanced semiconductor industry, and the United States and its allies are blocking access to imported technology.
China’s Huawei Technologies Co produced a smartphone to rival Apple Inc’s iPhone last year using top-of-the-line chips made with ASML’s immersion lithography machines.
ASML confirmed that the Dutch government partially revoked licences recently for the shipment of certain lithography systems to China, affecting a small number of customers there.
In a statement issued a Bloomberg report, the company said it’s held recent discussions with the United States about the scope and impact of its export control regulations, without elaborating.
US National Security adviser Jake Sullivan called the Dutch government about the matter late last year, the people said, and Dutch officials asked the United States to contact ASML directly about shipments of the equipment, called immersion deep ultraviolet lithography machines.
Shipments of a limited number of machines were cancelled following the US request, the people said, though it wasn’t immediately clear how many of the devices, which can cost tens of millions of US dollars apiece, were involved.
Spokespeople for the White House National Security Council and the Dutch Foreign Affairs Ministry declined to comment.
US pressure on the Veldhoven-based company started in 2019, when President Donald Trump’s administration pushed the Dutch government to ban sales of ASML’s top-of-the-line extreme ultraviolet lithography machines to China.
ASML is the only company that makes this technology, which is used to create semiconductors that power everything from smartphones to sophisticated military gear.
Then, pushed by Biden’s administration, the Dutch government tightened export controls on China further last year, restricting the DUV machines, the second-most advanced product line the company offers as of Jan 1. China has been rushing to stockpile them since.
Between July and November, China’s imports of lithography machines surged more than five times to US$3.7bil, according to Chinese customs data.
China accounted for nearly half of ASML’s sales in the third quarter, compared with 24% in the previous quarter and 8% in the three months ending in March, as companies there rushed to import their machines before export controls took effect.
ASML’s outgoing chief executive officer Peter Wennink told investors in October that the new curbs will affect as much as 15% of the firm’s sales in China.
Wennink has publicly opposed the measures and warned they might encourage China to develop competing technology.
“The more you put them under pressure, the more likely it is that they will double up their efforts,” he said last year in an interview. — Bloomberg
