Chief executive Christophe Fouquet of ASML Holding NV (NASDAQ:ASML), the world leader in semiconductor manufacturing equipment, has suggested stricter controls on the export of its technology to China could be on the agenda.
At the behest of the US government, the Dutch government recently barred ASML from shipping its deep ultraviolet (DUV) lithography machines to China.
ASML’s extreme ultraviolet (EUV) lithography machines, which are used to print the most cutting-edge artificial intelligence chips, were already subject to export controls.
There could be more restrictions to come.
Speaking at the Bloomberg Tech Summit in London today, Fouquet said: “If you look at the geopolitical landscape, I think it’s clear that the US will continue to apply pressure on their allies for more restrictions.
“The question is what is right for the Netherlands? What is right for Europe?”
He was asked if he would like more pushback from Dutch politicians against US pressure to change the country’s foreign policies. Fouquet, however, avoided commenting on these political decisions.
The prime motivation behind US-led export controls, noted Fouquet, was to limit China’s access to cutting-edge technology that could be used in military applications.
It is working. By limiting China’s access to ASML’s machines, Fouquet estimated that China is between 10 and 15 years behind the West’s chipmaking capabilities.
You don’t need to go to China to see proof that these export controls work.
Intel Corp (NASDAQ:INTC, ETR:INL), the former Silicon Valley powerhouse turned bit player in the modern age of tech, decided not to invest in EUV technology when its competitors TSMC and Samsung were ramping up purchases.
At $370 million per machine, it might have been a prudent decision three years ago. But amid mass layoffs, negative revenue growth and over $100 billion wiped from Intel’s share price in just three years, it was inevitably the wrong decision.
Despite existing export controls, China remains one of ASML’s largest markets. In the 2023 financial year, Chinese sales totalled €7.25 billion, behind only Taiwan, where the world’s preeminent chipmaker TSMC is based.