The U.S. wants to prevent China from buying advanced chip manufacturing equipment

A wafer contains new 3rd Gen Intel Xeon Scalable processors. Int
Source: Intel

The U.S. is asking ASML, the Netherlands company known for its advanced semiconductor production machinery, to not export its technology to China amid the ongoing race for semiconductor supremacy.

China has set its sights on ASML’s machines that use extreme ultraviolet (EUV) lithography capable fabricate sub-10 nanometre transistors. These machines cost around $150 million each and China wants a lot of them to bolster its domestic chip production.

However, as China is pressuring the Dutch government to approve the sales, the U.S. is asking them to block it, reminding the Netherlands that ASML’s machines wouldn’t work without U.S. components, components the U.S. could stop exporting to the country at any time.

Over the years, the U.S. has placed restrictive policies around sharing technologies with China for the sake of national security and to cement its lead in the tech race. It’s now urging other nations to do the same.

Under the new policies, many big Chinese technology companies are blocked from using semiconductor producers, called foundries, that use U.S. technology in their processes. Banned companies include China’s consumer giant Huawei and its chip design subsidiary HiSilicon. The restrictions caused Huawei to lose access to the Taiwanese Semiconductor  Manufacturing Company (TSMC), the world’s largest foundry right on China’s doorstep.

Caught in the unfortunate tug of war between two superpowers, the Dutch government and ASML are in a bind. China is a significant business opportunity for the Netherlands, but approving exports would mean souring the country’s relationship with the U.S.

Source: Wall Street Journal


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