On September 6, the Dutch government announced it would expand export licensing requirements for some ASML chipmaking equipment, retaking oversight from the United States and aligning export policies between the two nations. This decision arises amid ongoing U.S. efforts to restrict advanced technology access to Chinese chipmakers, which could support Beijing's technological and military advancements. According to ASML, the changes in oversight are not expected to affect the company's earnings this year or in the future, despite an immediate 1.6% drop in share prices.
Dutch Trade Minister Reinette Klever emphasized that the decision is motivated by safety concerns linked to technological developments increasing risks in exporting specific production machines. While U.S. and Dutch officials continue discussing export policies, this latest action aims to alleviate some existing tensions. The products affected include ASML’s 1970i and 1980i DUV (Deep Ultraviolet) immersion lithography tools, which sit in the middle of their product range.
The Dutch government has historically refrained from allowing ASML to ship its highest-end EUV tools to Chinese customers. It began requiring licenses for lower-tier DUV tools in September 2023, warning Chinese clients not to expect deliveries of these machines in 2024. However, in October 2023, the U.S. unilaterally instituted restrictions on the 1970i and 1980i tools, citing their incorporation of U.S.-made components.
This prompted discussions within the Dutch parliament regarding the implications for national sovereignty, as ASML faced challenges in complying with differing licensing requirements from both countries. The U.S. Department of Commerce recently updated its export regulations, which have now been mirrored by the Dutch rules that adopted similar language regarding lithography tools.
ASML's machines employ lasers to fabricate intricate chip circuitry, and there has been growing interest in the 1980i and 1970i systems due to the achievements of Chinese firms like SMIC, which have managed to produce advanced chips using DUV technology. ASML CEO Christophe Fouquet stated that, although Chinese chipmakers could theoretically produce chips at advanced technology levels (7nm, 5nm, and down to 3nm) with these tools, the process known as "multipatterning" may lead to diminishing yields, making it economically unfeasible in practice.
