ASML: U.S is forcing the company to stop selling its Lithography tools to the Chinese

July 7, 2022

2 min read

To prevent the sale of nearly all lithography tools made in the Netherlands to businesses in China, U.S. government representatives are collaborating with their Dutch counterparts which is the ASML. The Made in China 2025 strategy will be severely undermined if the American lawmakers are successful, as would China’s efforts to become a premier chip producer.

The main producer of lithography equipment needed to create various types of chips is ASML. The business is unable to provide its Chinese customers with EUV lithography equipment, though. However, American officials have proposed limitations that would prevent ASML from also selling its common deep ultraviolet (DUV) lithography tools to Chinese customers, according to Bloomberg (opens in new tab). The great majority of commonly used chips that drive client PCs, servers, mobile gadgets, autonomous cars, and robotics are produced by DUV.

It won’t be simple to convince the Dutch authorities to forbid the sale of almost all lithographic scanners to Chinese consumers. About 16 percent of ASML’s income in 2021(opens in new tab), which totaled $18.6 billion, was generated by Chinese fabs operated by domestic firms like Hua Hong, Semiconductor Manufacturing International Co. (SMIC), and YMTC, or by large multinational corporations like TSMC, Samsung, and SK Hynix.

Although it is the largest manufacturer of DUV scanners, ASML contends that Canon and Nikon also offer equipment of a similar nature.

Yet, if the U.S. manages to leave China without ASML’s tools, other companies will not be able to replace them soon. Furthermore, according to American legislators, improvements in contemporary chip packaging technology enable Chinese firms to design and manufacture quite complex semiconductors that can advance Chinese supercomputing and, ultimately, military capabilities.

In the meanwhile, the United States has other options besides just forbidding ASML’s scanners from being sold to Chinese businesses. Applied Materials, KLA, and Lam Research are just a few of the several American companies that produce hundreds of tools for semiconductor fabrication facilities.

Their inability to collaborate with China will severely hinder Tianxia’s semiconductor development. Moreover, national security issues prevent certain of their technologies from being exported to China.