The Netherlands declared new export regulations on sophisticated semiconductor gear on Friday, bowing to U.S. demands to shield China from obtaining essential chipmaking supplies.Businesses located in the Netherlands must obtain a permit prior to exporting specified high-tech semiconductor production tools to other countries.ASML, a dominant global semiconductor maker situated in the Netherlands, manufactures machines necessary for fabricating the most advanced chips.
The Netherlands revealed Friday that companies in the country must obtain a license before they can export particular types of high-level semiconductor producing equipment abroad from September 1 onward. This decision is likely in response to U.S. demands for a ban on China's access to key chipmaking tools.Being the home of the world-renowned semiconductor business ASML, whose machinery is essential for producing the most advanced chips, the news appeared to rattle investors, resulting in a 1.5% drop in ASML shares.
In October of last year, the U.S. unveiled regulations that were meant to block exports of essential chips and semiconductor technology to China, a move that analysts stated could hinder Beijing's efforts to strengthen its homegrown technology. Since then, the United States has been persuading countries it considers important semiconductor producers such as the Netherlands and Japan to impose export limits of their own.The U.S. sought to get the Netherlands, which is critical to the creation of advanced chips, to join their cause. The Dutch government wavered on the issue, but in March they established limitations on the export of cutting-edge semiconductor equipment. Friday's statement finalized those rules and established what kinds of items can and cannot be sent out.The law in question does not point out any particular country nor does it refer to ASML, the Dutch manufacturer of photolithography machines used in making chips, directly.The Dutch government declared that the regulations cover "a number of very particular technologies related to the development and fabrication of sophisticated semiconductors," which could plausibly be used in military purposes.Trade Minister Liesje Schreinemacher commented in a statement that the decision was taken from a national security perspective and should allow companies impacted by the rules to adjust in a timely manner.
ASML produces machines used by advanced chip makers such as Taiwan Semiconductor Manufacturing Co. Its two primary supplies are a deep ultraviolet (DUV) lithography machine, which is utilized in the production of memory chips utilized in devices like smartphones, laptops and servers, and has potential applications in artificial intelligence. The other is described as an extreme ultraviolet (EUV) lithography machine utilized for more advanced chips. The Dutch government has had rules in place since 2018 to control exports of ASML's EUV machines, while licenses will now be required to export the company's TWINSCAN NXT:2000i and other related tools. Starting prior to the law in September, ASML will start submitting export applications, with the government deciding whether to grant or deny them on a case-by-case basis. The company noted that it doesn't believe the new policy will have a major effect on its 2023 financial standpoint.
The Chinese Embassy in the Netherlands characterized the new Dutch government law as taking advantage of export control measures and wrecking global trade and international regulations. They implored the Dutch to be mindful of international trade conventions and bilateral economic and trade cooperation, and to directly right this wrong. The embassy further promised to collaborate with the Dutch to address this matter with the goal of mutual benefit and ultimately furthering bilateral economic and trade relations between China and the Netherlands.
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