Dutch Prime Minister Mark Rutte holds talks with US President Joe Biden. The United States has put pressure on the Netherlands to block exports of high-tech semiconductor equipment to China. The Netherlands is home to ASML, one of the most important companies in the global semiconductor supply chain.
Susan Walsh | AFP | beautiful pictures
Washington is eyeing the Netherlands, a small but important European country that could hold the key to China’s future in advanced semiconductor manufacturing.
The Netherlands has a population of just over 17 million — but is also home to ASML, a star of the global semiconductor supply chain. It manufactures a high-tech chipmaking machine that China desperately wants access to.
The United States appears to have persuaded the Netherlands to halt shipments to China at the moment, but relations appear to be fractured as the Netherlands weighs their economic outlook if they are cut off from the economy. second largest in the world.
The important chip role of ASML
ASML, based in the town of Veldhoven, does not manufacture chips. Instead, it produces and sells 200 million USD Ultraviolet Lithography (EUV) for semiconductor manufacturers like Taiwan’s TSMC.
These machines are required to make the most advanced chips in the world, and ASML has a de facto monopoly on them, because it is the only company in the world that manufactures them.
This makes ASML one of the most important chip companies in the world.
US-Netherlands negotiations
US pressure on the Netherlands seems to have started in 2018 under the administration of former President Donald Trump. According to one Reuters As of 2020, the Dutch government has withdrawn ASML’s EUV machine export license to China after extensive lobbying from the US government.
Under Trump, the US started a trade war with China, leading to a battle for technological supremacy, with Washington attempting to cut off vital technology supplies to Chinese companies.
Huawei, China’s telecommunications powerhouse, faces export restrictions starve it the chips it requires to make smartphones and other products, crippled its mobile business. Trump also used a export blacklist to cut off China’s largest chip maker, SMICfrom the US technology sector.
The administration of President Joe Biden has taken another step forward in its attack on China’s chip industry.
In October, the U.S. Department of Commerce’s Bureau of Industry and Security introduced scan rule requires companies to apply for a license if they want to sell certain advanced computing semiconductors or related manufacturing equipment to China.
ASML told it US employees stop serving Chinese customers after introducing these rules.
Pressure on the Netherlands to comply with US rules continues. Alan Estevez, Undersecretary of Commerce for Industry and Security at the U.S. Department of Commerce, and Tarun Chhabra, Senior Director for Technology and National Security at the U.S. National Security Council, report spoke to Dutch officials this month.
“Now that the US government has unilaterally imposed end-use controls on US companies, these controls will be useless in their view if China can take the this machine from ASML or Tokyo Electron (Japan),” Pranay Kotasthane, chair of the high-tech geopolitics program at the Takshashila Institute, told CNBC.
“Therefore, the US government wants to convert these unilateral controls into multilateral controls by involving countries like the Netherlands, South Korea, and Japan.”
The National Security Council declined to comment when contacted by CNBC, while the Commerce Department did not respond to a request for comment.
A spokesman for the Dutch Ministry of Foreign Affairs said it did not comment on visits by officials. The department did not respond to additional questions from CNBC.
stress
Last week, US Secretary of State Antony Blinken praised the “increasing convergence in its approach to the challenges posed by China”, particularly with the European Union.
But the picture from the Netherlands doesn’t appear much rosy.
“Obviously we are weighing our own interests, our national security interests are extremely important, obviously we have economic interests as you can understand and geopolitical factors. always play a role,” Liesje Schreinemacher, the Netherlands’ minister of foreign trade and development cooperation, said last week.
She added that Beijing is “an important trading partner.”
— CNBC’s Silvia Amaro contributed to this report
