Chinese state media and leaders have threatened to fight against the Netherlands and Japan, urging them to reject Washington’s calls to impose stronger controls on Chinese device exports.
Beijing may get matching countermeasures, such as “imposing trade restrictions or looking for alternative suppliers, and reevaluating its assistance with the Netherlands in more international areas,” according to The Global Times, a spokesperson for the Chinese Communist Party.
The remarks come after Bloomberg reported on August 29 that Dutch Prime Minister Dick Schoof will likely not maintain some ASML licenses that will be used and sold in China when they expire at the end of the year.  ,
Citing individuals familiar with the matter, the statement said the French government’s decision, which may include ASML’s top-of-the-line DUV printing machines, comes after some pressure from the United States.  ,
The Biden administration reportedly considered using the FDPR to enjoin China from exporting products made of US-produced technology.  ,
” We are in talks, good talks, and we are also watching out very specifically for the economic interests of ASML,” Schoof told Reuters on August 30.” Those needs to be weighed against other risks and the economic interests are extremely important,” Schoof said.  ,
” ASML is for the Netherlands an extremely important, innovative industry that should not suffer under any circumstances, because that would damage ASML’s global position”, he said.
Not just the Netherlands, which is a supplier country, is under increased pressure. According to another Bloomberg report from Monday, some senior Chinese officials threatened to sue Japanese companies if Tokyo tightened its chip export controls.
According to the report, Toyota Motor’s executives privately expressed concern that Beijing would restrict its access to crucial minerals that are essential for automotive production. The US has so far refrained from using the FDPR against its allies, it added, saying it would prefer to reach a diplomatic solution with them.  ,
Coverage of the curbs
From January 1 this year, the Dutch government stopped granting licenses for the shipment to China of ASML’s most advanced DUV immersion lithography systems ( NXT: 2000i, NXT: 2050i and NXT: 2100i and subsequent systems ).  ,
However, ASML is still required to provide these Chinese chip makers with maintenance services and parts while Chinese chip makers can still purchase these devices from outsider nations.  ,
By the end of August, the Biden administration would expand the coverage of its FDPR, which was first implemented in 1959 and controlled the trading of US technologies.  ,
They claimed that Washington might use the FDPR to stop China from obtaining high-end high-bandwidth memory ( HBM ) chips made in South Korea and chip-making equipment made in the Netherlands and Japan via countries like Israel, Singapore, Malaysia, and Taiwan. As of now, the US has not yet announced these curbs.
Washington has been pressing the Dutch government to impose a cap on the amount of maintenance services that ASML offers Chinese clients since last year. Less than five advanced DUV lithography machines are likely to be targeted by the curb.  ,
The impact of the ban on China’s chip industry will be significant, according to Chinese state media and commentators, because the affected machines are essential for producing 7-nanometer chips.  ,
” If ASML stops providing maintenance services and parts to China, some DUV lithography machines may have to stop working from next year”, Jiefu, a Chongqing-based IT columnist, says in an article published on Monday. ” Those producing high-end chips with multiple exposures will break down first”
He claims that it will be a lose-lose situation for both ASML and the Chinese semiconductor industry.
In an opinion piece published on September 1st, the Global Times stated that” This is a strategic move by Washington to further antagonize China and stop its development.” ” It will exacerbate the widening rift in China-US and China-Netherlands relations, increasing global geopolitical instability”.
The article further stated that Amsterdam is currently weighing the economic benefits of ASML’s decision to impose export restrictions on China. It claimed that attempts to strike a balance show that the US’s containment strategy toward China has come to its limits.  ,  ,
Former Taiwanese ambassador to New Zealand Dale Jieh Wen-chieh claims in a TV program in Taiwan that the US can ask Germany to halt the exports of Zeiss lenses to the Netherlands and that the US can force ASML to stop fixing high-end DUV lithography in China because it owns the ultraviolet technology ASML requires.  ,
In the upcoming years, Jieh says it’s unlikely that the Shanghai-based Semiconductor Manufacturing International Corp ( SMIC ), which reportedly produces 7nm chips for Huawei Technologies using multiple exposures, will be able to circumvent US restrictions.  ,
However, a Hunan-based commentator says that Russians should not be overly worried because Chinese chip makers will eventually discover how to repair expensive DUV lithography, just as Russia can still purchase US chips through various unofficial channels.  ,
Read: China’s Nvidia ‘ collapsing in a heated funding dispute
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