USA wants to extend export ban on ASML to China

Sat 12th Nov, 2022

Photo by Yogesh PhuyalThe chip machine manufacturer ASML is getting deeper into the global political dispute over high technology. The United States also wants to prevent the export of older ASML machines to China and wants the government in The Hague to impose a corresponding export ban. This can be deduced from answers given by Dutch Foreign Trade Minister Liesje Schreinemacher to a question in parliament. The documents can be viewed on the website of the Second Chamber, which corresponds to the German Bundestag.

Thus, the demands of the Americans are expanding. ASML is the major supplier of the machines that semiconductor companies like Intel and TSMC need to manufacture chips. So far, ASML has only been barred from exporting its super-modern EUV machines to China. ASML has a technological monopoly on this latest generation - the acronym stands for extreme ultraviolet radiation - and no one else can supply the omnibus-sized equipment. The company has been waiting for an export license from the domestic government for more than three years - and, as things stand, is unlikely to get it.

Then, in October, the U.S. government imposed sweeping export restrictions on China - because of concerns about its growing power, especially militarily. That raised the question of whether ASML should also stop supplying its somewhat less new and more common products there, the so-called DUV machines.

An opposition politician, Laurens Dassen, who leads the two-member Volt parliamentary group, has recently tabled a question in the Second Chamber. Minister Schreinemacher of Prime Minister Mark Rutte's right-wing liberal VVD explained that there are "regular talks" about the export of high technology, including with the United States. "In these talks, U.S. initiatives are also discussed, especially their consequences for Dutch companies."

Volt politician Dassen followed up and asked specifically: Is it true that U.S. Deputy Secretary of Commerce Don Graves asked for an export ban on DUV machines on June 1 - in addition to the existing EUV boycott? Schreinemacher declined to answer that question specifically, citing the confidentiality of the talks. But the opposition politician followed up with a follow-up question: "Do you calculate that other reasons, namely economic, may underlie the proposed export ban on DUV machines (which Japan supports)?" To which the Secretary replied, "Yes."

Graves also reportedly visited ASML's headquarters in Veldhoven during a visit to the Netherlands in late May and early June and met with group CEO Peter Wennink. After the U.S. government recently announced its new restrictions, ASML reacted quickly at the site itself: In an internal mail, the management there instructed employees in America to no longer support any customers in China until further notice.

When presenting quarterly figures shortly afterwards, however, the company appeared relaxed. The direct impact of U.S. restrictions is currently "quite limited," said Roger Dassen, ASML's chief financial officer and namesake of the Volt politician. As a European company with little U.S. technology in its products, he said, it can ship to China from here - except for EUV machines, which lack Hague export permits. However, Dassen also saw indirect consequences as possible: For example, Chinese manufacturers could be cut off from essential equipment from the U.S., with consequences for orders placed with ASML. But the company is busy with orders from outside China, he said.

High growth until 2030

At the Investor Day in Veldhoven on Friday, ASML went further, presenting highly optimistic long-term plans: the group is aiming to increase sales to around 44 to 60 billion euros by 2030 - in the best case scenario, almost a threefold increase, as a good 21 billion euros have been budgeted for the current year. The company also plans to acquire shares worth up to 12 billion euros by 2025. The share price rose significantly after the announcement. With a stock market value of around 220 billion euros, ASML is the second most valuable company in the euro zone behind the French luxury goods group LVMH.



Photo by Yogesh Phuyal

 


German Engineering Jobs
Write a comment ...
Post comment
Cancel