What is ASML, the globally-important chip company you've probably never heard of?
The Netherlands has become the latest country to say it will place controls on the export of semiconductor manufacturing equipment to China in a move that will have repercussions for Dutch tech giant ASML, the world leader in making microchip-building machines.
Countries rely on these advanced microchips — used in everything from smartphones to military equipment — and as a result in ASML's technology in producing them.
Here’s what you need to know about ASML, a critical part of the chipmaking sector that many may not have heard of:
- Headquartered in the Netherlands, ASML specializes in creating the parts used by chipmakers to create semiconductor chips.
- It is the only company in the world that produces extreme ultraviolet lithography systems, a hyper-advanced technology that etches patterns and structures onto tiny silicone slivers, which go on to become chips.
- Under The Hague’s new restrictions, this technology would see specific blocks on export to China. On Wednesday ASML said it would need to apply for specific output licenses, adding it would take time for the new legislation to come into effect.
- The company already hasn’t shipped its advanced lithography systems to China since 2019 because of existing export restrictions.
- ASML has consistently been caught in the middle of the U.S. and China’s ongoing trade dispute, and told its U.S-based employees last year to stop servicing Chinese clients following U.S. President Joe Biden’s initial export controls.
Speaking to the Financial Times, ASML head Peter Wennink said the ongoing trade dispute means he is working harder than ever to curtail intellectual property theft. “It’s like 1973, it’s like the oil crisis,” Wennink told the FT. “Oil was always there until it wasn’t, and it was a strategic commodity. Fast forward to 2020 and it’s the same thing with chips.”
The Dutch cabinet’s decision follows similar restrictions imposed by the U.S. and will impact China’s ability to rely on ASML.
The U.S. has long attempted to prevent China from accessing high-tech chips over fears Beijing may use them to produce advanced military equipment or weapons of mass destruction.
Last October, the Biden administration made it a requirement for chip manufacturers to apply for a license in order to export the technology to China.
In January, an investigation by The Wall Street Journal found that the state-run China Academy of Engineering Physics was able to access semiconductors in 2020, despite being blacklisted from exports in 1997.
Following Biden’s announcement, the Netherlands and Japan both agreed in principle to follow Washington’s lead and block China’s access to the technology. A de facto agreement was reached between the Netherlands and the U.S. in January.