The supply chain pressures created by the Covid-19 pandemic and the war in Ukraine are pushing nations into increasing conflict on the chipmaking front. Now, the U.S. is ratcheting up the stakes once again, reportedly working to stymie China’s expansion of its chipmaking capabilities by pressuring Dutch firm ASML from selling critical equipment to China.
The new move follows a nearly two-year clampdown on Chinese chipmaking that hit the headlines most prominently in late 2020, when the Trump administration placed major restrictions on Semiconductor Manufacturing International Corporation (SMIC), China’s predominant chipmaker, by adding it to the so-called Entity List. In effect, the restrictions prevented U.S. companies from supplying technology to SMIC unless they could receive a license to do so—ostensibly because SMIC was supplying the Chinese military.
But earlier, in 2018 and 2019, the Trump administration had also leaned heavily on the Netherlands government to prevent ASML—the leader in lithography machines for chipmaking—from selling its most advanced machines to China. The pressure indeed prevented the sale and denied China access to the extreme ultraviolet (EUV) lithography technology necessary to make many popular cutting-edge CPUs and accelerators (ASML is the only supplier of EUV tech).
In the absence of EUV, SMIC and China broadly have instead focused more heavily on deep ultraviolet (DUV) lithography, older tech used for comparatively coarser but more ubiquitous chips found in everyday devices. (China has even been using DUV machines for 7nm chipmaking, something typically reserved for EUV machines.)
It is this DUV segment that is the target of the United States’ new pressure on ASML. U.S. officials are reportedly pressuring the Dutch government to prevent ASML from selling China many of its DUV systems, a move that would dramatically expand the scope and impact of the existing ban on the sale of ASML’s EUV machines. So far, no decision has been reached, but it is also being reported that U.S. officials are exerting similar pressure on Japan vis-a-vis Nikon’s DUV machines.
“The discussion is not new. No decisions have been made and we do not want to speculate or comment on rumors,” an ASML spokeswoman told Bloomberg when asked about the matter.
Taiwan-based TSMC, meanwhile, is getting star treatment. Just last month, it was reported that TSMC (which is the world’s largest semiconductor foundry) will have access to an even more advanced mode of EUV (high-NA EUV) from ASML beginning in 2024. (Intel will also be an early customer for that technology.) Taiwan’s outsized role in tech production and its territorial tension with China have given it a renewed spotlight in recent years as those resources become increasingly scarce; President Biden, meanwhile, committed to military defense of Taiwan in the event of an invasion by China.