© Unsplash/Brian Kostiuk
In recent years, the issue of semiconductors has become very central to a technological, commercial and geopolitical conflict between China and the United States. Mastering the most advanced manufacturing processes means having the capacity to develop more advanced AI systems faster than the adversary.
But also to gain an advantage in the military domain, with missiles, radars and other advanced devices. Not to mention the ability to gain market share – potentially weakening the other party from an economic point of view. While the world leader in semiconductor manufacturing, TSMC, is based in Taiwan, and mainland China has been making thinly veiled threats of invasion for years, the problem has never been has also become real for the United States.
ASML and the Netherlands bow to the decision of the United States
< p>However, TSMC does not itself develop the machines used to engrave the most advanced semiconductors. This task is that of a very popular Dutch company: ASML. In fact it's very simple: this company's technology is around ten years ahead of its competitors. To engrave 7 nm processors or even finer nodes, less than 2 nm, having ASML machines is therefore simply essential in 2024.
For its part, China is the subject of increasingly heavy economic sanctions from the United States. Which limits its ability to manufacture advanced processors itself – not to mention DUV nanolithography machines (for nodes below 7 nm) and EUV (to go up to 2 nm and beyond). As a result, even China must source machines from ASML. Recently, the US Department of Commerce banned ASML from delivering EUV machines to China.
These machines, like many others from the firm, indeed contain an overwhelming number of American patents. The country therefore turned to a massive order for DUV machines that were a little less efficient, but still allowed more time to develop its own alternatives – with the ultimate goal of becoming fully independent from the United States. However, ASML had to cancel part of the order following a request from the Biden administration.
According to a Reuters report, the cancellation , ordered by the Dutch government, impacts “a small number of customers in China”. ASML, which has become one of the stars of equity portfolios around the world, emphasizes that this setback should not have a negative financial impact in 2023. However, nothing ;is very certain for the next few years. Indeed, China has gradually established itself as ASML's 3rd market, and even represented 46% of its total sales in the 3rd quarter of 2023.
“In recent discussions with the U.S. government, ASML obtained additional clarification on the scope and impact of U.S. export control regulations. ASML is fully committed to complying with all applicable laws and regulations, including export control legislation in the countries where we operate.”, says the firm .
- ASML is forced to cancel part of a massive machine order lithography to China.
- The request, approved by the Dutch government, comes from the United States.
- A maneuver that seems intended to slow down China's ability to acquire its own machines.
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