Dutch responds to US China policy with a plan to curb semiconductor tech exports

The Dutch government said on Wednesday it plans new restrictions on semiconductor technology exports to protect national security, joining efforts by the United States to curb chip exports to China.

The U.S. in October imposed sweeping export restrictions on shipments of U.S. chipmaking equipment to China, but for the restrictions to be effective, it needs other key suppliers in the Netherlands and Japan, which also oversee key chipmaking technology. , to agree. Allied countries have been in talks on this issue for months.

Dutch Trade Minister Liesje Schreinemacher announced the decision in a letter to parliament, saying the restrictions would be introduced before the summer.

Her letter did not name China, a key Dutch trading partner, or ASML Holding NV ( ASML.AS ), Europe’s largest technology firm and a major supplier to semiconductor makers, but both will are affected. He specified one technology that will be affected is “DUV” lithography, the second most advanced machine that ASML sells to computer chip makers.

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“Because the Netherlands considers it necessary for reasons of national security to control this technology as quickly as possible, the Cabinet will introduce a national control list,” the letter said.

ASML said in a response that it expects to have to apply for licenses to export the most advanced segment among its DUV machines, but this will not affect its financial guidance for 2023.

ASML dominates the market for lithography systems, the multimillion-dollar machines that use powerful lasers to create the tiny circuitry of computer chips.

The company expects sales in China to remain around €2.2 billion in 2023 – implying relative contraction as the company expects overall sales to grow by 25%. ASML’s major customers such as Taiwan Semiconductor Manufacturing Co. and Intel are engaged in capacity expansion.

ASML has never sold its most advanced “EUV” machines to customers in China, and most of its DUV sales in China go to relatively less advanced chipmakers. Its biggest South Korean customers Samsung and SK Hynix both have significant manufacturing capacity in China.

The Dutch announcement leaves big questions unanswered, including whether ASML will be able to service the more than 8 billion euros worth of DUV machines it has sold to customers in China since 2014.

Schreinemacher said the Dutch government had decided on the measures “as carefully and precisely as possible … to avoid unnecessary disruption of value chains”.

“It is important for companies to know what they are facing and have time to adapt to the new rules,” she wrote.

Japan is expected to issue an update on its chip equipment export policies later this week.

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