The Dutch government has formally joined US efforts to deny China access to equipment and software needed to expand the Middle Kingdom’s semiconductor manufacturing capabilities.
The measures, in a letter to the Dutch parliament from Trade Minister Lisje Schreinmacher this week, do not name China or ASML, but explicitly restrict sales of deep ultraviolet lithography machines. These complex multi-million-dollar assemblies are used to etch microscopic features into the silicon.
“Semiconductors are of great strategic importance for future military and civilian applications. The Netherlands plays an important role in the world of this value chain,” reads the letter translated into English. “Given the technological developments and the geopolitical context, the government has come to the conclusion that it is necessary to extend the existing export controls of specified semiconductor production equipment for national and international security.”
The document outlines three goals which include preventing Dutch goods from contributing to unwanted military applications by foreign powers; preventing unwanted strategic dependencies; and maintaining Dutch technological leadership.
Meanwhile, ASML confirmed in a statement that the new export controls would mean “ASML will be required to apply for an export license for shipments of the most advanced immersion DUV systems.” It added: “In this regard, it is important to consider that the additional export controls do not pertain to all immersion lithography equipment, but only to the so-called ‘most advanced’.”
The decision represents a major victory for the US, which has been pressuring the Netherlands and other allies in the Asia Pacific to mirror the Biden administration’s aggressive export restrictions that have systematically targeted Chinese chip makers such as YMTC and SMIC. is targeted.
For China, the potential loss of ASML as a supplier could severely constrain their ability to produce semiconductors domestically. DUV machines, while no longer the most advanced chipmaking equipment, are still heavily used to produce chips down to about 14 nm.
The sale of ASML’s EUV tools has already been banned since 2019.
The US implemented similar export controls in October, which barred three US firms – Lam Research, Applied Materials and KLA Corp – from selling their most advanced chipmaking equipment to China.
The actual mechanism by which the Dutch intend to enforce these controls appears to mirror the American “unverified” and “entities” lists. These include the names of countries and organizations that require sellers to have special licenses before selling them.
According to the letter, the Dutch government will analyze the risk associated with the sale of specific items and restrict exports if it determines they threaten the country’s national security. This means that Chinese firms may still be able to obtain some DUV equipment from ASML, depending on how restrictive the Dutch government is when it comes to licensing.
a lithography wildcard
However, the Dutch government’s decision to join America’s silicon blockade of China leaves Japan as a source of DUV equipment.
According to the International Trade Administration, Japan’s semiconductor industry revolves mostly around the production of equipment and materials used to make chips. Major players include Nikon and Canon, which are best known for making photographic equipment, but also make DUV lithography machines.
According to Reuters, the Japanese government is expected to announce new rules as early as this week restricting the sale of semiconductor manufacturing equipment to China.
However, as previously reported, Japanese lawmakers have indicated that the country’s trade restrictions may not be as strict as those in the US or the Netherlands.
“The United States is getting tougher, but there is a question of whether we have to match it exactly,” Akira Amari, a former minister of Japan’s Liberal Democratic Party, said last month. What we share is a recognition of concern over equipment. ” If this proves to be the case, it could make a huge difference in the blockade of the Biden administration.
China is already faltering
The latest round of trade sanctions imposed on China by the US and its allies has caught the attention of Chinese leaders. The Chinese parliament this week announced sweeping reforms aimed at reducing its reliance on foreign technology.
In the wake of the Dutch decision, Chinese Foreign Ministry spokesman Mao Ning was quoted as saying “We hope that the Dutch side will adhere to an objective and fair position … act to safeguard its own interests, and abuse of export control measures will not follow. Some countries.” In this case, “some country” is almost certainly the US. refer to.
Meanwhile, SMIC – China’s TSMC – revealed this week that it is having trouble sourcing equipment for the new fabs. During its earnings call this week, the company said that mass production at its fab site in Jingcheng had been postponed by “one to two quarters” as a result of “bottleneck tool delays.”
It is unclear whether the equipment in question refers to a DUV lithography machine or other equipment. However, the timing of the Dutch government’s decision means that SMIC anticipates problems obtaining the necessary licenses to remodel the facility for large-scale production.
And it’s not just chip-making equipment that China is having trouble getting its hands on. As we reported this week, Chinese imports of semiconductors and integrated circuits fell 26.5 percent, attributed to US sanctions.
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