Dutch government regains export control of two ASML tools from US

By Toby Sterling

AMSTERDAM (Reuters) – The Dutch government said on Friday it would expand export licensing requirements for some of ASML’s integrated circuit-making equipment, effectively taking over oversight of it from the United States and unifying the two countries’ policies.

The United States previously unilaterally regulated these tools as part of a campaign to restrict access to advanced technology by Chinese chipmakers that could contribute to Beijing’s technological and military advances.

ASML said in a statement it does not expect the regulatory change to impact profits this year or in the future.

Shares in Dutch company ASML, Europe’s largest technology company, were down 1.6 percent at 708.40 euros by 0915 GMT.

“I am making this decision for our safety,” Dutch Trade Minister Reinette Klever said in announcing the update.

“We see that due to technological developments there are more security risks in the export of these particular production machines.”

While the U.S. and the Netherlands are still in talks over export policy, Friday’s decision is a practical move that should ease some tensions between the governments.

The machines in question, ASML’s 1970i and 1980i DUV (deep ultraviolet) immersion lithography machines, positioned roughly in the middle of the company’s product range.

Under pressure from the United States, the Dutch government never allowed ASML to supply its best EUV tools to Chinese customers, and in September 2023 began requiring licenses for the NXT:2000 series and better DUV tools.

ASML has warned Chinese customers that deliveries of these tools should not be expected in 2024.

However, in October 2023, the United States unilaterally began restricting ASML’s shipments of 1970i and 1980i tools, arguing that they contained U.S.-origin parts.

Members of the Dutch Parliament raised questions about the impact of the decision on Dutch sovereignty, while ASML was grappling with having to meet separate licensing requirements in the US and the Netherlands.

The U.S. Department of Commerce updated its export regulations on Thursday, and the updated Dutch regulations adopted the U.S. wording in the relevant sections regarding lithography, a segment of ASML.

ASML machines use lasers to create tiny electronic circuits.

The interest in the 1980s and 1970s machines stemmed from the success of Chinese companies such as SMIC, which had success in producing advanced integrated circuits by repeatedly processing silicon wafers on DUV devices, a process known as “multipatterning”.

At an event in New York on Wednesday, ASML CEO Christophe Fouquet said Chinese chipmakers will be able to produce chips at 7nm, 5nm and eventually 3nm using DUV tools — better than the limits set by Washington.

But chipmakers using the technique will face increasingly poor performance, making it a feat of engineering prowess but economically unviable, he added.

(Reporting by Toby Sterling; Editing by Alison Williams and Philippa Fletcher)