ASML Faces Partial Export Ban of Chipmaking Equipment to China by Dutch Government

ASML, a leading global supplier of photolithography systems for the semiconductor industry, has announced that the Dutch government has partially revoked an export license for the shipment of some of its machines to China. This decision comes in response to increased U.S. government pressure aimed at limiting China’s ability to produce its own chips.

The affected machines are part of a model range that has required a Dutch export license since September 2023. ASML has stated that it has received further clarification regarding the scope and impact of recent U.S. rules, which will affect sales to a limited number of advanced production facilities.

The Dutch government reviews export license requests on a case-by-case basis, focusing on national security grounds. The exact number of machines that will be affected by the cancellation is unclear, but ASML has assured investors that it will not have a material impact on 2023 earnings.

ASML’s third-largest market after Taiwan and South Korea, China was the biggest market in the third quarter of 2023, accounting for 46% of the company’s sales. Chinese customers have been advised not to expect to receive licenses for the NXT:2050i and NXT:2100i systems affected by the licence revocation from January 1, 2024.

Beijing has criticized the Dutch government’s decision, calling on it to protect the common interests of both countries and maintain the stability of international supply chains. The Dutch foreign ministry has stated that it reviews export license requests on a case-by-case basis, focusing on national security grounds.

ASML dominates the market for lithography systems, which use lasers to help create chip circuitry. Its customers in China, including Semiconductor Manufacturing International Corporation (SMIC), Hua Hong, Nexchip Semiconductor, Wuhan Xinxin Integration Dianlu Manufacture, and United Nova Technology, did not respond to requests for comment.

This partial export ban is a significant development in the ongoing tensions between the U.S. and China regarding technology and trade. It remains to be seen how this decision will impact the semiconductor industry and the broader technology landscape.