US Wants to Further Restrict China's Access to Chip-Making Tools
China already faces restrictions on the most advanced chip-making tools, but the US is attempting to go further and block access to older chip technology, too.
Semiconductor manufacturing relies on photolithography, and Dutch multinational ASML Holdings dominates the market for producing the required hardware. The company's most advanced Extreme Ultraviolet (EUV) machines can't be sold to China, but its older Deep Ultraviolet (DUV) machines can, and DUV is used for the majority of chip production in the world today.
As Bloomberg reports(Opens in a new window), according to people familiar with the matter it's DUV the US is proposing to restrict next, which would seriously impact the ability of Chinese companies to manufacture semiconductor products. A visit by US Deputy Commerce Secretary Don Graves to the Netherlands and Belgium back in early June included a visit to ASML's HQ and new restrictions are thought to have been part of a discussion with CEO Peter Wennick.
Why talk of restrictions needs to be taken seriously is because, as Reuters points out(Opens in a new window), lithography and semiconductor equipment are viewed as "dual use" technology. That means they can be used for both commercial and military applications. With that in mind, an export license is required for the technology to be sold in different markets around the world.
As far as ASML is concerned, nothing has changed. According to a company spokesperson, "No decisions have been made, and we do not want to speculate or comment on rumors." That didn't stop ASML's US shares taking a hit on hint of new restrictions, which is unsurprising considering China counts as the company's third largest market.
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