US urges China to end maintenance of ASML machines

The US hopes to further restrict the presence of ASML technology in China. Joe Biden's administration is trying to kill maintenance contracts with Chinese partners.

ASML's export restrictions on state-of-the-art equipment have been in place for some time. As a result, China does not have access to EUV technology, which currently makes more complex microchips possible. Because of concerns about the use of semiconductors in the military arsenal, the United States hopes to control its international competitor technologically through these restrictions.

ASML equipment depends on US partners for certain file areas, giving the US more control over where scanners can go. Also, the US is pressuring the Netherlands to meet certain demands. For example, the country successfully lobbied for an early halt to the supply of some machinery to China.

Maintenance is important

Given the high complexity, ASML scanners cannot be run without first being set up by company personnel. This means China cannot acquire technology in a roundabout way. Maintenance also depends on the in-house expertise of Veldovan. By nixing the deals, the U.S. hopes to push China's chip industry further back.

Additional motivation may come from the fact that it has now been revealed that Huawei has managed to create a more advanced System-on-a-Chip (SoC) than was realistically thought. The Kirin 9000S in the Huawei Mate 60 Pro smartphone is baked in a 7-nanometer process, something China's own could not do. It is still several generations behind State of the art: TSMC, for example, has already been packing iPhone chips at 3nm for the past four years, bypassing the N6 (6nm) and N5 (5nm).

Discussions are still ongoing

It is not yet clear what the final outcome of the negotiations between the US, the Dutch government and ASML will be. While the Americans could do their own best to prevent ASML equipment from falling into China's hands, monitoring maintenance is more difficult. Additionally, this will again be a financial loss for ASML. It cannot trade with China, the company's biggest sales market behind Taiwan.

Prime Minister Rutte said the Netherlands' restrictions should prevent trade as much as possible. During a state visit to China, he was warned by President Xi Jinping not to create more restrictions.

read more: ASML reiterates its demand that the House of Representatives remain in the Netherlands