The US government seeks to halt ASML from selling any more tools to China that are used in Semiconductor Manufacturing

In conjunction with partners from the Netherlands, officials from the US government are attempting to ban sales of all lithography tools produced by companies in China.

US government officials urge ASML to cease the selling of tools for manufacturing semiconductors to China

This action by the government will significantly halt and hopefully dissuade China from becoming the foremost global semiconductor producer. The country has worked on following through with the “Made in China 2025 plan”. The Made in China 2025 plan aims to contrive a transformation for the country from existing as a low-level manufacturing location to evolving into a high-level goods producer. A section of the main goal is to access China’s wealthy home consumer base and the value-added from the global sourcing segment.

ASML “manufactures complex lithography systems critical to the production of microchips, unlocking the potential of people and society by pushing technology to new limits,” states the company’s website. Currently, ASML cannot sell its EUV lithography equipment, EUV meaning “extreme ultraviolet,” to China. US Politicians intend to place restrictions upon ASML to deny them the ability to sell the company’s DUV or deep ultraviolet lithography tools used in computers, servers, mobile devices, autonomous cars, and artificially intelligent robots, Bloomberg reports.

Unfortunately, the task will not be an easy one. Fabrication factories run by local manufacturers such as Hua Hong, SMIC, and YMTC, along with the global manufacturers, such as TSMC, SK Hynix, and Samsung, make up around a fifth of the company’s revenue last year, which peaked at $18.6 billion. Asking ASML to halt the sales of almost the entire lithography scanner market to customers in China would be detrimental.

Readers should not that ASML is not the only manufacturer of DUV scanners, as Canon and Nikon are also players in manufacturing those types of tools, even if they do not make as large of an impact as ASML. The US government plans to cut off China’s ability to access those tools promptly, shifting control away from China. The political parties also worry that not only are the semiconductors used for advanced supercomputers but also for military options.

As of this writing, the United States government has banned many companies located in China from receiving technologies produced by North American-based companies. For instance, they have removed HiSilicon away from Huawei’s chip access, causing the company to close.

Several American companies like Applied Materials, KLA, and Lam Research are also instructed to halt working with Chinese investors or partners. That action affects Tianxia’s semiconductor endeavors, which may see the same outcome as HiSilicon. Also, some devices cannot be marketed to China for national security reasons.

Whatever the outcome, we will see a shift in DRAM and 3D NAND memory, as a large section of that market comes from Chinese companies. Eventually, this will harm American chip manufacturers.

News Sources: TomsHardware, Bloomberg, ASML

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