Computer chip equipment maker ASML said the Dutch government had partially revoked an export license to ship some of its machines to China, prompting a dip in shares and a protest from Beijing on Tuesday. The Veldhoven-based company dominates the global market for lithography systems, which use lasers to help create the circuitry that makes chips. The move comes amid increasing tensions between the Netherlands and China, with Beijing accusing the West of trying to prevent it from developing its advanced semiconductor industry.
“A license for the shipment of NXT:2050i and NXT:2100i lithography systems in 2023 to China has been partially revoked by the Dutch government, impacting a small number of customers in China,” ASML said in a statement after a report by Bloomberg. The two systems are used to produce advanced logic and memory chips.
The company said it has been in contact with the Dutch government and the U.S. Department of Commerce to receive further clarification on the scope and impact of new export control rules that have been put in place. It said the rules would affect sales to “a limited number of advanced production facilities in China.”
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ASML’s shares dropped 3.8 percent on Tuesday after the Dutch government’s statement, just weeks before new restrictions on high-end chipmaking equipment take effect. The export license was revoked in response to requests from the Dutch Ministry of Foreign Affairs, which was acting on behalf of the Ministry of Economic Affairs, according to ASML.
The license revocation relates to machines in the model range that, following pressure from the U.S. government aimed at undermining China’s ability to make its advanced semiconductors, had required a Dutch export permit since September 2023. The machine types include the XT:2050i and XT:2100i, immersion deep ultraviolet (DUV) lithography systems.
Washington is pressing the Netherlands to align with its crackdown on Chinese development of sophisticated technologies. In March, President Joe Biden’s administration outlined plans for additional restrictions on the Dutch, including reining in exports of the most advanced versions of ASML’s older immersion deep ultraviolet, or DUV, lithography machines.
The revocation of the license means that if Chinese customers want to buy a new DUV machine, they will need to obtain one from a non-Chinese supplier, which could mean an extra capital outlay and more red tape. It could also delay the rollout of a new European factory that leading chipmakers like Taiwan’s TSMC, South Korea’s Samsung, and Intel are building to produce more advanced 2-nanometer chips. The technology is the heart of smartphones, self-driving cars, and artificial intelligence. Its success is considered an essential element of global prosperity and national security. But it is also a prime target for industrial espionage by Chinese and other governments.