Two mid-range chips from ASML’s portfolio will now be regulated by the Netherlands itself. The 1970i and 1980i chip machines, based on DUV lithography, were already blocked for Chinese customers by the US.
The Schoof administration is effectively aligning its own policy with U.S. regulators. Washington already had far-reaching control over chip equipment because ASML uses U.S. suppliers. Under Prime Minister Mark Rutte, the Netherlands deviated from U.S. policy on several occasions, although that only affected ASML’s leeway to provide maintenance and repairs in China.
Foreign Trade Minister Reinette Klever says she made the decision “for our security. Those advanced chips can be used for military applications.” There is no question of an export ban; however, ASML must obtain a license before it can ship equipment.
The Sheaf shift
We’ve mentioned recently that the Dutch coalition under Prime Minister Dick Schoof has a different view around Chinese containment. In his former role as director general of the AIVD, Schoof was already highly skeptical of China’s intentions. Curtailing the Chinese government in the area of technology is an issue that fits his profile much better than his predecessor Rutte. The latter mainly tried to keep trade from decreasing too drastically.
For ASML, the curtailment is unfortunate. It was recently revealed that it owed half of its sales to China. Former CEO Peter Wennink indicated in July that the China restrictions were mostly political and not based on numbers. His successor Christophe Fouquet is equally dissatisfied. He called the curtailments, initially driven by America, “economically motivated.”
Little will change for ASML, it says. The rules will simply be“harmonized” between Washington and the Dutch government in The Hague.
Read also: Will the Dutch buckle under U.S. pressure to further restrict ASML?