Wednesday, July 6th 2022
US Wants ASML to Stop Product Shipments to China
ASML is one of the critical semiconductors companies, as they provide tools for making actual silicon. Located in the Netherlands, they are famous for their DUV and EUV lithography tools, used to etch designs onto silicon wafers. According to the report from Bloomberg, the United States governing body is negotiating with the Dutch government to restrict the export of ASML's products to China. This came to affection following US Deputy Commerce Secretary Don Graves's visit to the Netherlands to discuss supply chain issues and meeting with ASML Chief Executive Officer Peter Wennink. While these suggested export restrictions could be beneficial to the strategic placement of US against China, it would hurt ASML's revenue as sales in China accounted for a 16% share of the company's revenue in 2021.
It is recorded that the Chinese spending spree on tools has been the greatest among every country, lasting for two years in a row. By banning ASML from exporting its lithography tools to China, the US could theoretically halt Chinese plans for achieving the government's intended semiconductor independence. The talks with the Dutch government and ASML are still a work in progress, so we are yet to see if the deal is finalized. Additionally, it is worth pointing out that the major US semiconductor manufacturing tool makers like Applied Materials and Lam Research are already banned from exporting to China.
Source:
Bloomberg
It is recorded that the Chinese spending spree on tools has been the greatest among every country, lasting for two years in a row. By banning ASML from exporting its lithography tools to China, the US could theoretically halt Chinese plans for achieving the government's intended semiconductor independence. The talks with the Dutch government and ASML are still a work in progress, so we are yet to see if the deal is finalized. Additionally, it is worth pointing out that the major US semiconductor manufacturing tool makers like Applied Materials and Lam Research are already banned from exporting to China.
49 Comments on US Wants ASML to Stop Product Shipments to China
If ASML doesn't use USA patents then it's just extortion, what place has a foreign country from the other side of Atlantic meddling with the business relationships between two other sovereign nations?
I'm not aware of using anything from them, not even TSMC. Only GloFo and Intel.
sorry
it already started (at higher production cost obviously) just tink of vietnam,taiwan etc..
China has been guilty of stealing IP. There's no doubt there. That said, they're capable of doing that largely because companies setup shop there. It's difficult to have IP that cannot be dissected in the country that is responsible for actually fabricating it. It is immensely depressing that this is where we are, but no party is free of responsibility here.
Now, the tech side. Lithographic machines are stupid expensive, and there are some pretty awesome patents pertaining as to how they actually work. As such, there's only one real supplier of the lithographic machines because the barrier to entry is just nutty. This means that most machines for lithography never die they leave one plant, and get bought out by a cheaper low end manufacturer to run for years thereafter. Assuming the EUV machines are sent primarily to the EU and USA, there'll be a break in the manufacturing process forever. The current best chips are not capable of being fabricated, then the affordable stuff can't be, and finally the dirt cheap stuff disappears. This cripples manufacturing far beyond a single generation of chips.
It's my belief that the politics here are an attempt to deal a single blow, that forces a different way of thinking going forward. It'll be interesting. Imagine a China that can't source Intel and AMD processors...but they can scale up RISC to be a viable desktop. Maybe some of those cheap Chinesium desktops will actually be pretty good? I say this, because like most copies they're often garbage until they can actually have something unique to compete on. Read: AMD and Bulldozer. Itanium and Intel. Xerox and literal photocopy machines. Everything is bad, until it isn't. I'm also looking at you M2 from Apple...a company that demonstrates in a walled garden RISC has many benefits to offer.
While I think that this move by the US is about sourcing their own machines, I also think this is an opportunity for China. If they are actually capable of doing their own work, instead of simply stealing IP as they're regularly accused of, then we might just see some innovation. That said, the short term squabbling between politicians is pretty much all about optics. I'm getting tired of the outrage from both sides...and just hope that our largest concern is going to be affordable chips in the next decade.
So, are we sanctioning The Netherlands now?
If USA don't want to sell it's their right of course.
What isn't right, is all these wars all over the world (middle east included) in order to bring "democracy" lol, when in reality the target is the natural resources of these countries (including oil) and after US troops left the people suffer even more than before, even USA politicians (like Tulsi Gabbard for example) start to admit this!
THIS! This is why we can't have nice things.
On one hand - this looks like reaching too far and USA does it often. Even if done for a good reason where/when does it stop?
On the other - China is NOT our friend and is becoming more belligerent, not to mention the much talked about open stealing.