Netherlands Join US in Restricting Chip-Making Exports to China

ASML machine being shipped in container slots in a 747 Credit: ASML) The Netherlands government has unveiled new export restrictions on China. The new rules will prevent China from purchasing its most advanced semiconductor equipment. The world’s largest manufacturer of machines that make the actual chips, ASML, is located in the Netherlands. The new rules apply only to its Deep Ultra Violet (DUV) immersion lithography and deposition tools. The move will see the Dutch join the US in controlling what technology China can acquire. It comes after more than two years of talks between the two countries and Japan on restricting China’s access to advanced chip-making capabilities. The Dutch government says it made the move to protect its national security.

In late 2022, the US announced its own set of restrictions against China. It stated it did so to prevent the country from being able to produce chips with military applications. That includes building supercomputers, modeling nuclear weapons, or creating advanced weapon systems. At the time they were announced, ASML instructed its employees to stop installing or servicing any chip-making equipment it has in place currently in China, according to The Washington Post.

The TWINSCAN NXE:3400B will support EUV volume production at the 7 and 5 nm nodes. (Credit: ASML)

ASML previously could not sell its most advanced extreme ultraviolet lithography (EUV) equipment to China. It couldn’t acquire the necessary export license from the government thanks to pressure from the US, according to TechSpot. The new rules will prevent it from selling its deep ultraviolet lithography (DUV) equipment. ASML says it needs time to understand these new regulations.

“These new export controls focus on advanced chip manufacturing technology, including the most advanced deposition and immersion lithography tools. Due to these upcoming regulations, ASML will need to apply for export licenses for shipment of the most advanced immersion DUV systems,” ASML’s statement reads. The rules seem to apply only to its “most advanced” tools. Therefore, it should still be able to sell equipment for mature nodes to Chinese clients. However, the company needs time to better understand the specifics of the new rules.

China did not take kindly to the word of the new restrictions. According to the BBC, it’s already filed a formal complaint. The complaint says the country hoped the Netherlands would not “follow the abuse of export control measures by certain countries.” It’s expected that Japan will follow the Netherlands shortly, which would compound Bejing’s troubles. Last year, China was discussing forming a chip consortium to challenge Intel and AMD. However, without access to the most advanced chip-making tools, that initiative is dead in the water. The move by the Netherlands could also put pressure on China to make a move on Taiwan’s crown jewel, TSMC. However, Taiwan has previously warned China that TSMC’s fabs would be inoperable in such an event.

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