ASML Sees ‘Fairly Limited’ Impact From Latest US Curbs on China

Cagan Koc and Debby Wu, Bloomberg News

An entrance to the ASML Holding NV manufacturing plant in Berlin, Germany, on Wednesday, Jan. 5, 2022. ASML shut a part of its German manufacturing site after a fire earlier this week, causing concern the closing could exacerbate a global chip shortage. , Bloomberg

(Bloomberg) -- Key chip equipment supplier ASML Holding NV said it sees “fairly limited” impact from the latest US export control measures to restrict China’s access to cutting-edge semiconductor technologies, a fact that highlights the challenges Washington faces with its efforts to get allies on board to suppress China’s technological rise.

“The fact that we are a European company with limited US technology in it of course creates this situation where a direct impact on us is fairly limited,” ASML Chief Financial Officer Roger Dassen said in a video released together with earnings on Wednesday, adding that the company will comply with US regulations.

While the company still cannot ship its most advanced machines to China, Dassen said that the company can continue to ship less sophisticated tools out of Europe to Chinese customers.

Earlier this month, Washington unveiled sweeping regulations to curb the sale of advanced semiconductors and chipmaking equipment to China and ban US persons from helping with China’s development of chip technologies, sending shockwaves through the $550 billion industry.

The new US move dealt a major blow to China’s chip industry. American firms including Applied Materials Inc., KLA Corp. and Lam Research Corp. pulled employees from China’s top memory chipmaker, while ASML told its employees in the US to refrain from servicing customers in China. ASML expects the total indirect impact from U.S. measures to be around 5% of its backlog, Chief Executive Officer Peter Wennink said on Wednesday.

The administration of US President Joe Biden continues to express its wish for allies to collaborate on export control mechanism when it comes to restricting China’s access to critical chip technologies.

Earlier this year Washington renewed its pressure on the ASML to halt sales of the firm’s immersion lithography machines, its second most advanced products after extreme ultraviolet lithograph systems, to China, and Dutch newspaper FD has reported that the US Department of State again broached the subject of collaboration on chip issues with Europe earlier this month.

Earlier this year, Washington renewed its pressure on the Dutch government to halt ASML’s sales of its immersion lithography machines -- its second most advanced products, after extreme ultraviolet lithograph systems -- to China. Dutch newspaper FD has reported that the US Department of State again broached the subject of collaboration on chip issues with Europe earlier this month.

The Dutch government has yet to consent to the US demand that ASML should stop supplying China with immersion lithography machines.

In June, Dutch Prime Minister Mark Rutte said the European Union shouldn’t isolate China and that the block should develop its own policies toward the Asian country. German Chancellor Olaf Scholz also said recently that decoupling from China is the wrong answer for resolving economic woes.

--With assistance from April Roach.

(Updates information on US lobbying in final three paragraphs.)