Tech Cold War: US China clash heats up with ASML block

ASML, a leading supplier of chip making equipment, has canceled some of its shipments to China after the US government intervened, according to reports. The move is seen as part of the US efforts to curb China's semiconductor ambitions, which have economic and national security implications. ASML is a Dutch company that produces lithography machines essential for creating circuits on microchips.

The company is one of the few in the world that can make extreme ultraviolet lithography systems (EUVs), which use powerful lasers to etch tiny patterns on silicon wafers. These machines enable chip makers to produce smaller, faster, and more energy efficient chips used in various products, from smartphones and computers to cars and weapons.

ASML's customers include global giants such as Samsung, Intel, and Taiwan Semiconductor Manufacturing Company (TSMC), which supply chips to Apple, , and other major brands. This development followed the disclosure that SMIC employed ASML's technology to produce the , Huawei's latest high end processor.

According to , the US government asked ASML to stop some of its planned deliveries of its most advanced machines to China weeks before a new export ban took effect on January 1, 2024. The ban, imposed by the Biden administration last October, aims to prevent non US companies from exporting semiconductor chips and lithography machines that contain US origin technology or components to China without a license.

The US has been pressuring its allies to join its efforts to restrict China's access to critical technologies, citing concerns over China's military modernization and human rights violations. In July 2023, the Dutch government agreed to limit the sales of ASML's deep ultraviolet (DUV) lithography machines to China, the second most sophisticated machine it makes after the US's persuasion.

In a statement, ASML confirmed that the Dutch government had partially revoked its license to ship two types of lithography machines to China, affecting many customers. The company said it had obtained further clarification from the US government on the scope and impact of the US export control regulations.

China has denounced the US actions as "hegemonic and bullying behavior" and urged the Netherlands to be impartial and respect market principles and the law. Chinese foreign ministry spokesperson Wang Wenbin said the US interference would harm the common interests of both countries and their companies and disrupt the stability of the global supply chain.

He said China would continue to support its domestic semiconductor industry and promote innovation and development in the field. ASML said it expected the cancellation of the shipments to have a minimal impact on its financial guidance for 2023. The company said it would continue to engage with its customers, suppliers, and governments to ensure compliance with the relevant laws and regulations..