As Washington and Beijing move towards technological decoupling, semiconductor chips and equipment have become the center point of national security efforts. The US has placed export controls against Chinese technology firms from purchasing chips and equipment. Now Washington is pushing the Netherlands to ban one of its top chipmakers from selling semiconductor equipment to Chinese companies.
Bloomberg first reported Washington's recommendation to Dutch chip equipment maker ASML Holding NV to halt selling some of its older deep ultraviolet lithography, or DUV, systems. Even though these machines are one generation behind cutting-edge, they can still make high-tech chips for automobiles and consumer electronics.
Responding to the Bloomberg report, Chinese Foreign Ministry spokesman Zhao Lijian criticized Washington on Wednesday for "technological terrorism" as both countries are locked in a chip race.
If the Netherlands agrees, it will significantly increase the type of chipmaking equipment now prohibited for export to China.
Washington has also pressured Japan to stop shipping semiconductor machines to China.
Meanwhile, the writing was on the wall. Amir Anvarzadeh of Asymmetric Advisors said, "Chinese chipmakers have been hoarding second-hand equipment since the Trump era."
Anvarzadeh said banning the most advanced machines was "clearly not enough to halt China's advancement in semiconductors, especially since much of the chips used for defense purposes are using geometries that were far less advanced."
Since the Trump-era tariffs on consumer goods and export curbs on semiconductor chips and equipment for Chinese firms -- China has been the biggest buyer of chipmaking gear in the last two years.
The move by Trump to begin the curbs has been continued under the Biden administration, showing a much larger issue of America's survival and worry about China catching up in the chip race.
Wall Street analysts responding to the Bloomberg report say a complete ban preventing ASML from exporting semiconductor equipment, such as deep ultraviolet lithography systems, is unlikely. Here are the thoughts of several analysts (list courtesy of Bloomberg):
If ASML halts semiconductor equipment exports to China on behalf of Washington, the US must be prepared to accept the consequences.