Dutch restricts export of semiconductor targeting China

The Dutch government has unveiled fresh measures to restrict the export of certain semiconductor equipment, aligning with the United States-led campaign to limit the supply of high-tech components to China.
BE SemiconductorThe move has provoked an angry response from Beijing. China has urged the Netherlands to not hinder bilateral cooperation in the semiconductor industry and to not abuse export controls, China’s Ministry of Commerce said in a statement.

Dutch Trade Minister Liesje Schreinemacher stated that the decision was taken in the interest of national security, as the equipment in question could have military applications.

The new restrictions are expected to impact only a small number of companies and specific product models, with China not being explicitly named. Nevertheless, the Chinese Embassy in the Netherlands criticized the move, describing it as an “abuse of export control measures” that violates trade rules.

ASML, a major Dutch company supplying equipment to computer chip manufacturers, stated that it does not anticipate any significant impact on its business as a result of the new rules, and it will not be altering its financial guidance.

The regulations will necessitate companies producing advanced chipmaking equipment to obtain a license before exporting their products. The effective date for these rules is set for September 1. Alongside the announcement, a technical document outlining the specific equipment requiring a license was released.

This list is the outcome of a high-level agreement between the United States and two ally nations with strong chip equipment industries, namely the Netherlands and Japan. The objective is to tighten restrictions as part of Washington’s efforts to curtail China’s capability to produce its own chips.

ASML, Europe’s largest technology firm, confirmed that the top section of models of its second most advanced DUV lithography systems, used in chip circuitry printing, will require a license. The company specified its 2000 series and subsequent models. Notably, ASML’s most advanced EUV machines have never been shipped to China.

ON the other hand, ASM International, a manufacturer of atomic layer deposition tools, does not foresee a significant impact on its forecasts due to the Dutch regulations, which also cover this technology.

In October, the United States imposed export restrictions on American chipmaking tools destined for China from companies such as Lam Research and Applied Materials, citing national security concerns. The U.S. has been actively urging other countries with key suppliers to implement similar measures. China condemned this move, further intensifying the already heightened tensions between the two countries, which have encompassed issues ranging from 5G equipment to alleged spy balloons and relations concerning Taiwan.

According to a Reuters report, the U.S. may introduce additional rules next month that could affect slightly older models of ASML machines. Since ASML’s products incorporate U.S. technology, the U.S. has direct regulatory control over the company.

China called on the Netherlands to immediately correct its wrongdoings, asserting that the restrictions imposed under the guise of national security are essentially trade restrictions that would harm both Dutch and Chinese companies.

Schreinemacher anticipates approximately 20 license applications per year, representing only a limited part of the total product portfolio of the affected companies.

ASML has been prohibited from selling EUV machines without a license under the international Wassenaar Arrangement agreement. European Union countries generally utilize the Wassenaar Arrangement to determine which exports are restricted on security grounds, as they share a common trade policy.

While the new Dutch list may potentially be adopted by other European countries or added to the EU list in the future, few European firms currently export high-end chipmaking equipment. German manufacturers, including Trumpf (providing lasers) and Zeiss (providing lenses), supply essential parts to ASML.