After devoiding China of its advanced chips, the US is now targeting China’s ability to manufacture its own chips.
The US government plans to push the Dutch government to restrict ASML from servicing some of its equipment in China. Under influence, the Netherlands recently revoked ASML’s advanced DUV license for China.
Advanced Semiconductor Materials Lithography (ASML) is the world’s biggest chip-making equipment manufacturer and China is its second largest market, after Taiwan. ASML’s equipment is almost impossible to replace and no one has tried to use them without the company’s maintenance.
If China is denied ASML’s servicing, its most advanced chip manufacturing plants will eventually be rendered helpless. This will be a serious blow to Chinese chip manufacturing. This will definitely motivate the country to look for alternatives.
The Dutch government, a strong ally to the US, intends to keep this cold war’s effect on the business minimum. As ASML is the largest company in the country, the government wouldn’t want its business to be affected by this. So, the Dutch government has to play this out with extreme diplomacy.
In a recent meeting with the Dutch Prime Minister Mark Rutte, China’s President said, “The Chinese people also have the legitimate right to development, and no force can stop China’s scientific and technological development and progress.” Even though ASML equipment rules Chinese chip manufacturing right now, China plans for self reliance in the long term. China could eventually replace ASML equipment with its Shanghai Micro Electronics Equipment (SMEE), its domesting chip-making equipment manufacturer.
