US wants ASML to stop servicing China-owned chip equipment

Dutch lithography giant caught in crossfire amid escalating tensions

ASML is again at the center of chip wars controversy with reports that Washington wants the Dutch government to stop the company servicing and repairing chipmaking equipment it has sold to customers in China.

According to Bloomberg, the move is part of a broader push by the Biden administration to tighten up export restrictions already in place to curb China's ability to develop and produce advanced semiconductors.

The Biden administration is pressing allied nations including Germany, Japan, South Korea, and the Netherlands – home to photolithography giant ASML – to impose additional measures to prevent Beijing from advancing its chipmaking efforts, despite the existing restrictions.

Citing unnamed sources said to be familiar with the matter, Bloomberg reports that Washington is unsurprisingly meeting resistance from allies, many of whom want to wait and see how the impact of existing restrictions unfold before embarking on a further round of measures that might hurt manufacturers in their own countries.

ASML is caught up in all of this, as The Register has written before, because its photolithography machines are in high demand by chipmakers around the globe as a key part of the manufacturing process.

Last year, the Netherlands formally joined US efforts to block Chinese access to tools to develop and manufacture cutting-edge semiconductors following months of pressure from Washington.

While the company's most advanced extreme ultraviolet (EUV) systems were already barred from export to China, the Dutch government brought in new restrictions covering some of its deep ultraviolet (DUV) kit as well.

Not content with this, in January it emerged that the US government had pushed ASML into cancelling some shipments to China before the new restrictions even came into force at the start of the year.

Now it appears the US wants the Netherlands to go even further, and prevent ASML from servicing and repairing chipmaking equipment that Chinese clients purchased before the restrictions were put into place.

In effect, the US is asking a company which is a major player in the economy of an allied nation to no longer honor contracts with customers to appease Washington's policymakers.

According to the report, the US also wants Japanese companies to limit exports to China of specialized chemicals that are used in the chipmaking process, such as photoresist materials.

We asked the US Department of Commerce to confirm that Washington wants allies to further tighten export restrictions to China, and if it would comment on the specific claim about ASML.

ASML told us that it was aware of the reports, but could not comment on what appears to be no more than talks between governments at this stage.

We understand the Netherlands wants closer collaboration between European Union member states on the implementation of export controls, following last year's events.

The Dutch government is said to be unhappy that it implemented export restrictions such as those affecting ASML at the behest of the US, but many other European governments declined to follow suit.

In response, the Netherlands wants discussions with other EU member states about improving coordination in the European export control framework, especially during the earliest stages of any fresh restrictions being mooted.

Earlier this week, ASML was in the news over reports that it might move some operations outside of the Netherlands due to migration policies that it said would restrict its ability to hire the skilled staff. ®

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