No sales, and no service.
There’s a new development just about every other day on the seemingly ever escalating tech war between China and the US. The latest development is a request from the US government to Dutch-based ASML that it stop servicing advanced chip making equipment the firm has sold to China.
ASML is already banned from selling extreme ultraviolet (EUV) and deep ultraviolet (DUV) lithography machines to China.
According to Reuters, a US delegation is due to meet with Dutch government officials and executives from ASML on Monday to discuss the matter. By halting the servicing of equipment Chinese companies already own, the US hopes the chipmaking capabilities of Chinese manufacturers could be disrupted, if not completely shut down in some instances.
China is ASML’s third largest market after Taiwan and South Korea. The issue is complicated as many companies, including TSMC and SK Hynix, have plants in China, so sanctions are expected to target individual Chinese chip makers, with exceptions for companies with acceptable licenses.
US demands aside, the Dutch government has its own security concerns. It’s a strong supporter of Ukraine, and it has concerns that chips sourced from China are finding their way into weapons and equipment used by Russia. A major source of enmity between the Netherlands and Russia was the downing of Malaysia Airlines flight MH17 in 2014, which killed 298 passengers and crew, including 193 Dutch citizens.
Despite ongoing efforts to hobble the capabilities of Chinese chip makers, the Taipei Times reports that such efforts haven’t had a critical impact as of yet. Chinese manufacturers have shown resilience and are continuing efforts to insulate themselves from escalating sanctions.
Paul Triolo, a senior associate with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies: “The cutting-off of servicing is going to inexorably degrade the capabilities of that equipment. And so the manufacturer will be fighting a sort of rearguard action to keep those machines going as long as possible.”
Should the servicing ban come into effect, it won’t be received well. Chinese Foreign Ministry spokesperson Zhao Lijian previously labeled such moves as examples of “technological terrorism.”
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