Dutch Chip Equipment Maker ASML Halts Planned Exports To China Following US Administration's Influence

The U.S. administration has successfully persuaded Dutch chip equipment producer ASML Holding NV (NASDAQ:ASML) to halt some of its pre-planned exports to China.

What Happened: The intervention took place weeks prior to the enforcement of more stringent Dutch regulations on high-end chipmaking equipment exports in January, as per a Bloomberg report. The U.S. President Joe Biden‘s administration sought ASML’s cooperation in stopping the shipments of certain machines to Chinese clients as a strategy to impede Beijing’s progression in its own advanced semiconductor industry.

ASML, the sole manufacturer of this specific technology, held licenses to export three top-of-the-line deep ultraviolet (DUV) lithography machines to China until the new regulations were implemented. These machines are crucial for the production of semiconductors, which are essential components in a wide variety of devices, from smartphones to advanced military equipment.

Upon the U.S. request, a number of shipments were called off, but the exact number of the affected units, which are worth tens of millions of dollars each, remains undisclosed.

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Peter Wennink, ASML’s CEO, has expressed concern that these measures might incite China to develop a competing technology. He pointed out that these new restrictions could affect up to 15% of ASML’s sales in China.

Why It Matters: The move comes in the backdrop of a significant year for Huawei Technologies Co., which saw its revenue skyrocket by 9% in 2023 in spite of US sanctions. The Chinese tech giant’s revenue was boosted by a thriving smartphone sector and robust 5G equipment sales.

Meanwhile, NVIDIA Corp (NASDAQ:NVDA), the world’s leading chipmaker, was forced to market a stripped-down version of its premier gaming chip in China due to US export controls.

The US administration’s latest action against ASML seems to be a part of its strategy to limit China’s growing technological prowess. However, this move could also inadvertently spur China to develop its own competing technologies.

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