By Reuters | Updated: 3 January, 2024
AMSTERDAM, Jan 2 (Reuters) – Computer chip equipment maker ASML (ASML.AS) said the Dutch government had partially revoked an export licence for the shipment of some of its machines to China, prompting a slide in shares and criticism from Beijing.
The company said the government had pulled an export licence for some machines in a model range that, after U.S. government pressure aimed at undermining China’s ability to make its own chips, had required a Dutch licence since September 2023.
ASML said it has received “further clarification of the scope and impact” of more recent U.S. rules, which it said will affect sales to “a limited number of advanced production facilities”.
It was unclear how many machines would be affected by the cancellation, although the company said it would not have a material impact on 2023 earnings.
ASML shares fell 2.5% to close at 664.3 euros ($728.14) on the first trading day of 2024.
In recent years, China has been ASML’s third-largest market after Taiwan and South Korea, but it was the biggest in the third quarter of 2023, with 46% of the company’s sales.
Chinese customers had been advised not to expect to receive licences for the NXT:2050i and NXT:2100i systems affected by the licence revocation from Jan. 1, 2024.
Beijing criticized the latest move, with foreign ministry spokesman Wang Wenbin calling on the Netherlands “to protect the common interests of both countries and their companies, and maintain the stability of international supply chains”.
A spokesperson for the Dutch foreign ministry said on Tuesday it reviews export licence requests on a case by case basis on national security grounds.
ASML, Europe’s largest technology firm, dominates the market for lithography systems – large machines that use light beams to help print circuitry, a crucial step in the chip-making process.
Being denied access to ASML’s two most advanced lithography machines from the Netherlands mean that Chinese customers will need to explore alternative options to procure similar tools, as well as mitigate potential impacts to production, according to analyst Stewart Randall.
“Chinese customers will have to continue finding ways to get these equipments, cope with lower yields and perhaps buy more equipment to achieve similar capacity goals,” said Randall, a Shanghai-based chip analyst at consultancy Intralink.
ASML did not say which customers were due to receive the machines, but its customers in China include Semiconductor Manufacturing International Corporation (SMIC) (0981.HK), according to company disclosures.
Semiconductor Manufacturing International Corporation (SMIC) (0981.HK) and foundry peers Hua Hong (688347.SS), Nexchip Semiconductor (688249.SS), Wuhan Xinxin Integration Dianlu Manufacture and United Nova Technology (688469.SS) – did not respond to requests for comment.
Faced with U.S.-led restrictions, the Chinese government has been investing heavily to develop a self-reliant semiconductor supply chain. Shanghai Micro Electronics Equipment (SMEE) is China’s only known maker of lithography machines.
Last month, one of its shareholders Zhangjiang Group said the company had developed a lithography machine for use on the 28nm production node – several generations behind current cutting-edge chips – in what would mark a breakthrough for the company and China.
($1 = 0.9123 euros)
© Thomson Reuters 2024
