Netherlands set to further restrict semiconductor technology exports
March 9, 2023, 23:40:02 CET | Wikinews

Thursday, March 9, 2023 

ASML headquarters in Veldhoven on May 22, 2008. Image: A ansems.

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The Chinese Semiconductor Manufacturing International Corporation factory in Shenzhen on January 1, 2022. Image: Lhzss8.
Dutch trade minister Liesje Schreinemacher wrote lawmakers yesterday announcing the government will detail additional curbs on exporting semiconductor chip technology "on national security grounds".

Her letter to the States General of the Netherlands read in part: "In view of technological developments and geopolitical context, the government has come to the conclusion that it is necessary for (inter)national security to extend the existing export control of specific semiconductor production equipment [...]

"Because the Netherlands considers it necessary on national security grounds to get this technology into oversight with the greatest of speed, the Cabinet will introduce a national control list", to be published "before the summer."

The exact list of products affected were decided with "surgical" precision, "in order to avoid unnecessary disruption of the value chains and to take into account the international level playing field."

It comes after at least three months of negotiations with the United States, which unilaterally introduced expansive export restrictions in October to limit Chinese firms' access to foreign chips and tools to make their own, due to fears of military application.

US officials conceded, however, the measures' efficacy would be reduced without international co-operation. The Associated Press reported in January similar restrictions were agreed to by Dutch and Japanese functionaries when they visited Washington, D.C. for talks, with separate tête-à-tête discussions that month between US President Joe Biden and the nations' prime ministers.

Schreinemacher told reporters in Brussels, Belgium last November the Dutch government was "having talks with the US", saying: "We do share the concerns [the US government has] when it comes to China, when it comes to security" and Dutch "national security interest is of the utmost importance."

Without commenting on the prospect of similar restrictions being introduced, the minister said the US export controls' observed negative impact on Dutch companies were "for the right reasons [...] national security interests."

Veldhoven, North Brabant-based ASML Holding, Europe's largest technology company, dominates the production of the laser lithography systems necessary for computer chips; it has offices in Beijing and Shenzhen and a Hong Kong regional headquarters.

The firm has reported about 16% of its 2021 sales, or over €2 billion, were to China.

Among products sold are advanced deep ultra violet (DUV) systems, which were mentioned as affected by the new controls in Schreinemacher's letter as "very specific technologies in the semiconductor production cycle on which the Netherlands has a unique and leading position".

A statement on the company's website confirms "ASML will need to apply for export licenses for shipment of the most advanced immersion DUV systems."

However, it clarifies not all immersion lithography tools are affected, and states based on "our expectation of the Dutch government’s licensing policy, and the current market situation, we do not expect these measures to have a material effect on" either its 2023 or long-term financial outlooks.

This follows a November 11 assurance by CEO Peter Wennink that a scenario where Chinese chipmakers couldn't expand their capacity could mean a "temporary hiccough" but wouldn't "change the 2030 picture that much" because "ultimately those chips need to be made."

Its 2023 sales projection for China estimates near-zero growth to €2.2 billion even as ASML expects overall sales to expand by 25%.

Key questions remain, including whether ASML will be allowed to service the DUV machines already sold, and what precisely is affected—while Schreinemacher's letter mentions "the most advanced [DUV] immersion lithography and deposition", it does not name ASML, who has interpreted "most advanced" to mean its 'critical immersion' systems.

Existing controls have prohibited ASML from supplying China chipmaking technology with their most advanced extreme ultraviolet lithography systems since 2019, of which they are the world's sole producers. These curbs were introduced following US fears they could be 'dual use' with military potential.

China has criticised restrictions as disrupting ordinary trade relations, its Ministry of Commerce stating after Washington's initial announcement the US "should stop the wrongdoings immediately and give fair treatment to companies from all over the world, including Chinese companies."

Despite trading barbs, a US State Department spokesperson told CNBC that where "China is pursuing asymmetric decoupling", Secretary of State Antony Blinken has "said we do not want to sever China’s economy from ours".

Sources quoted by Reuters expect Japan to update its own export policies as soon as this week.

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Sister links[edit]
China–United States trade war
Semiconductor industry in China
Related news[edit]
"China warns US to avoid trade confrontation" — Wikinews, May 22, 2007
"Restrictions imposed in China textile trade with U.S." — Wikinews, May 21, 2005
Evelyn Cheng. "U.S. says it doesn't want to separate its economy from China's" — CNBC, March 9, 2023
"Statement regarding additional export controls" — ASML Holding, March 8, 2023
Toby Sterling, Karen Freifeld, Alexandra Alper. "Dutch to restrict semiconductor tech exports to China, joining US effort" — Reuters, March 8, 2023
"Dutch government to restrict sales of processor chip tech" — Associated Press, March 8, 2023
Dee-Ann Durbin, Aamer Madhani. "Source: Dutch, Japanese join US limits on chip tech to China" — Associated Press, January 29, 2023
"Netherlands in talks with U.S. on China chip policy - Dutch trade minister" — Reuters, November 25, 2022
"ASML CEO: Would not change 2030 growth targets if China excluded" — Reuters, November 11, 2022
Stephen Nellis, Karen Freifeld, Alexandra Alper. "U.S. aims to hobble China's chip industry with sweeping new export rules" — Reuters, October 10, 2022

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