While China wants to be self-sufficient when it comes to the production of chips, the U.S. has come up with ways to prevent this from taking place. One way that the U.S. has accomplished this is by pressuring the Netherlands to prevent Dutch firm ASML from shipping its most advanced lithography machines to China. These large and expensive machines are necessary when it comes to the production of cutting-edge chips.
The U.S. ban on selling EUV machines to China is hurting the Netherlands’ economy
What these lithography machines do is etch circuitry patterns on a wafer. Considering that powerful mobile chips have billions of transistors inside, these patterns have to be thinner than human hair. The most advanced lithography machines use a process known as Extreme Ultraviolet Lithography (EUV) and each machine costs $150 million, has 100,000 parts, and weighs close to 200 tons. These machines are available only from Dutch company ASML.
As big as a school bus and priced at $150 million each, this is an ASML EUV machine
The next most advanced method of lithography is known as Deep Ultraviolet Lithography (DUV) and ASML also manufactures these machines along with other firms like Nikon, and Canon. These machines can be purchased by Chinese chipmakers.
The Biden administration is trying to get U.S. allies including the Netherlands and Japan to block shipments of more chip-making equipment to China. A trip to the Netherlands is scheduled later this month for Alan Estevez, the undersecretary of commerce for industry and security. He hopes to discuss export controls with Dutch officials.
Chinese President Xi is trying to talk the Netherlands into allowing EUV sales to China
The Chinese have been putting their own pressure on the Netherlands. Last week, during the G-20 meeting, Chinese President Xi Jinping spoke with Dutch Prime Minister Mark Rutte and urged him to avoid disrupting global trade. Xi stated, “We must oppose the politicization of economic and trade issues and maintain the stability of the global industrial chain and supply chain.”