Being a leader can also have its drawbacks. Chip machine manufacturer ASML has noticed this recently. Veldhoven has not been allowed to sell its advanced machinery to China for some time, and additional restrictions will be added in September.
Chips are used for many things these days. Not only in phones, laptops, cars and washing machines, but also in defense equipment such as missiles and drones.
And few companies can match the manufacturing technology offered by Brabant. Machines from Europe’s largest technology company are also very popular in China.
But it raises eyebrows in America. They have ended up in a war with China and therefore more or less forced the Netherlands to take action. The US fears that the Chinese will copy ASML’s technology and use it for military purposes.
Last week it became clear that technology exports would be further restricted from September. The Cabinet deliberately did not mention ASML and China by name. But in practice, the people of Brabant are not allowed to supply China with a more advanced version of their deep ultraviolet (DUV) machines.
ASML is in the geopolitical firing line
This means that both the government and ASML are involved in a geopolitical battle between the world’s two largest economies. China and the US view each other as threats and their relationship has deteriorated rapidly in recent years.
The previous US president unleashed a trade war against the Chinese. Donald Trump introduced massive import tariffs on Chinese goods, after which the Asian nation decided to introduce tariffs on US goods. A technology war has also erupted, in which the US wants to contain China’s growth as much as possible.
This previously prevented ASML from supplying its state-of-the-art machines – the EUV (extreme ultraviolet) variant – to China. Joe Biden has been appointed instead of Trump. But it continues to take a hard line against China.
Biden and Rutte spoke in Washington
Earlier this year, Prime Minister Mark Rutte and Foreign Minister Wopke Hoekstra visited the United States. During their meeting with the US President, they discussed the ASML issue and other matters. Rutte did not say what exactly was discussed. But a few months later, the cabinet came up with a new ban.
The Veldhoven-based company expects the financial consequences of the new policy to be less than expected. “We do not expect these measures to have much of an impact on financial expectations for 2023,” ASML said in a statement.
This is because the company manufactures many types of machines. The manufacturer is still allowed to sell part of it to China. The group also does business with other countries. So the latest annual report shows that the order book at ASML is fuller than ever.
This is an updated version of an article that appeared on NU.nl in March.
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