Dutch Government Revokes Part Of ASML Export License To China

ASML computer chip equipment manufacturers limit exports to China (photo: x @ASMLcompany)

JAKARTA - On Tuesday January 2, computer chip equipment manufacturer ASML announced that the Dutch government had partially revoked export licenses for the delivery of some of their engines to China. This led to a decline in the company's shares and drew criticism from Beijing.

The company stated that the government revoked export licenses for several machines within a certain range of models, which, after pressure by the United States government to undermine China's ability to manufacture its own chips, had required Dutch licenses since September 2023.

ASML said it had received "further clarification on the coverage and impact" of the United States' newer rules, which it said would affect sales to "a limited number of state-of-the-art production facilities".

It's unclear how many machines will be affected by this cancellation, although the company says it won't have a material impact on 2023 revenue.

ASML shares fell 1.3% to 673.10 euros at 09.53akutime on the first trading day of 2024.

In recent years, China has become ASML's third-largest market after Taiwan and South Korea, but in the third quarter of 2023, China became the largest with 46% of the company's sales.

Chinese customers have been informed not to expect to get a license for the NXT:2050i and NXT:2100i systems affected by license revocation since January 1, 2024.

Beijing criticized this latest move, in which Foreign Ministry spokesman Wang Wenbin called on the Netherlands "to protect the common interests of their two countries and companies, as well as maintain stability of international supply chains".

A spokesman for the Dutch Ministry of Foreign Affairs said Tuesday that they were reviewing requests for export licenses case by case on the basis of national security.

ASML, Europe's largest tech company, dominates the litography system market - a massive machine that uses light rays to help print circuits, an important step in the chip manufacturing process.

ASML customers in China - including Semiconductor Manufacturing International Corporation (SMIC), Hua Hong, Nexchip Semiconductor, Wuhan Xinxin Integration Dianlu Manufacture and United Nova Technology - did not respond to requests for comment.

Facing restrictions led by the US, the Chinese government has invested on a large scale to develop its self-conducting semiconductor supply chain. Shanghai Micro Electronics Equipment (SMEE) is the only known lithographic machine maker in China.

Last month, one of its shareholders, Zhangjiang Group, said the company had developed a litographic engine for use in the production of 28nm nodes - several generations behind the latest chips - in what would be a breakthrough for companies and China.