AMSTERDAM / WASHINGTON —
The Netherlands’ government on Wednesday said it planned new restrictions on exports of semiconductor technology to protect national security, joining the United States’ effort to curb chip exports to China.
The U.S. in October imposed sweeping export restrictions on shipments of American chipmaking tools to China, but for the restrictions to be effective, they need other key suppliers in the Netherlands and Japan, who also oversee key chipmaking technology, to agree. The allied countries have been in talks on the matter for months.
Dutch Trade Minister Liesje Schreinemacher announced the decision in a letter to parliament, saying the restrictions would be introduced before the summer.
Her letter did not name China, a key Dutch trading partner, nor did it name ASML Holding NV, Europe’s largest tech firm and a major supplier to semiconductor manufacturers, but both will be affected. It specified one technology that would be affected: “DUV” lithography, the second-most advanced machines that ASML sells to computer chip manufacturers.
FILE – Dutch Trade Minister Liesje Schreinemacher is pictured in Irbil, in the Kurdistan region of Iraq, April 27, 2022.
“Because the Netherlands considers it necessary on national security grounds to get this technology into oversight with the greatest of speed, the Cabinet will introduce a national control list,” the letter said.
ASML said in a response it expected to have to apply for licenses to export the most advanced segment among its DUV machines, but that would not affect its 2023 financial guidance.
ASML dominates the market for lithography systems, multimillion-dollar machines that use powerful lasers to create the minute circuitry of computer chips. The company expects sales in China to remain about flat at $2.3 billion in 2023 – implying relative shrinkage as the company expects overall sales to grow by 25%. Major ASML customers such as Taiwan Semiconductor Manufacturing Co. and Intel are engaged in capacity expansion.
ASML has never sold its most advanced “EUV” machines to customers in China, and the bulk of its DUV sales in China go to relatively less advanced chipmakers. Its biggest South Korean customers, Samsung and SK Hynix, both have significant manufacturing capacity in China.
The Dutch announcement leaves major questions unanswered, including whether ASML will be able to service the more than $8 billion worth of DUV machines it has sold to customers in China since 2014.
Schreinemacher said the Dutch government had decided on measures “as carefully and precisely as possible … to avoid unnecessary disruption of value chains.”
“It is for companies of importance to know what they are facing and to have time to adjust to new rules,” she wrote.
Japan is expected to issue an update on its chip equipment export policies as soon as this week.
The Netherlands has responded to the US-China policy with a plan of its own to curb areas of potential conflict and ensure relations remain cordial.
In a statement issued on Wednesday, the Dutch Ministry of Foreign Affairs announced the launch of an official initiative: the Netherlands-US-China Alliance. This alliance is designed to bring together the three major economic powers, and provide a forum for dialogue and understanding.
The initiative reflects a clear desire on the part of the Netherlands to remain an important diplomatic, economic, and ideological partner of the US and China. The alliance is aimed at ensuring that all sides play a role in reducing tensions, developing constructive solutions to potential conflicts and helping to promote a more inclusive, digitally driven global economy.
The main objectives of this alliance are to encourage more ‘person-to-person’ diplomatic engagement, create opportunities for increased collaboration within and between the three countries and ensure greater transparency of policy and process. According to the Dutch Ministry of Foreign Affairs, the initiative is also aimed at strengthening existing agreements and initiatives, in particular the Paris Agreement on Climate Change.
The start of this initiative coincides with the current tension in US-China relations, with the Netherlands hoping to bridge differences between the two countries. The alliance is not intended to replace the existing US-China relations, but to provide an additional layer of mutual support.
The Netherlands are well placed to take a leading role in this new initiative, given their expertise in areas such as trade, climate change and digital technology. The plan is to foster a more constructive and cooperative relationship between the US and China, with the Netherlands playing a facilitating role.
The Netherlands-US-China Alliance is an important step in the global effort to help create a more collaborative and prosperous world, with the Dutch positioned as an active mediator between these two superpowers.