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ASML halts shipments of chipmaking equipment to China under US pressure

Intel Foundry Services

Semiconductor equipment maker ASML has canceled planned shipments of some of its advanced chipmaking machines to China following a request from the United States government.

People familiar with the matter said the Biden administration contacted ASML directly in recent months to halt shipments of certain deep ultraviolet (DUV) lithography systems to Chinese customers. The canceled shipments were to take place before new Dutch export restrictions on such technology took effect on January 1.

ASML, which is based in the Netherlands and dominates the global lithography machine market, said on Monday that a license covering the shipment of its systems to China in 2023 had "recently been partially revoked" by the authorities.

Although it is believed to affect a small number of customers, the company said it has been discussing export control regulations with the US but did not provide details on the number of machines affected.

In recent discussions with the US government, ASML has obtained further clarification of the scope and impact of the US export control regulations. ASML is fully committed to comply with all applicable laws and regulations including export control legislation in the countries in which we operate.

The move is part of US efforts to curb China's ambitions to develop an independent, advanced semiconductor industry. Chipmakers in China, including Semiconductor Manufacturing International Corporation (SMIC) and Hua Hong Semiconductor, saw their share prices fall slightly after this decision.

China is a significant market for ASML, accounting for 46% of its sales last quarter as clients rushed to import DUV lithography machines before the new curbs took effect. However, the US is pressuring allies like the Netherlands to deny China access to critical chipmaking tools.

National Security Adviser Jake Sullivan had previously called the Dutch government in late 2023 to discuss the matter. The tightened restrictions will cut ASML's sales to China by as much as 15%, according to outgoing CEO Peter Wennink.

Sources: Bloomberg and Reuters

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