TMTPost -- The Netherlands may tighten up on exports of chipmaking machines made by ASML Holding NV to China.

Credit：ASML

The Dutch government plans to curb ASML's ability to repair and maintain the semiconductor-making machinery it supplies to chip makers in China, Bloomberg reported Thursday, citing people familiar with the matter. Dutch officials are unlikely to renew certain licenses that ASML needs to service and provide spare parts in China when they expire at the end of this year, and their decision is expected to cover the company’s most advanced deep ultraviolet lithography (DUV) machines, or  according to the sources.

Founded in 1984, ASML provides comprehensive lithography solutions encompassing hardware, software, and services, assisting chip manufacturers in large-scale image etching on silicon wafers. Meanwhile, ASML is currently the only manufacturer of EUV lithography systems in the world. As a key for the future lithography technology and advanced process, EUV lithography is the most expensive step in making the advanced microchips that power data centers, cars and iPhones. 

The latest news of further curbs suggest ASML’s Chinese customers could lose at least some of post-sales supports as soon as next year. The Netherlands-based  company sells its equipment with maintenance agreements that are essential to keep them running.

The Dutch government declined to comment. ASML didn't respond to a request for comment. The report is the latest sign that the United States is seeking  leverage with allies to rein in China through access restrictions of advanced semiconductor technology.

ASML has been restricted from selling its high-end machines in China since 2019 due to U.S.-led export controls. The company confirmed at the beginning of this year that a license for the shipment of NXT:2050i and NXT: 2100i has been revoked by the Dutch government, but added the revocation just affected a small number of customers in China.

Later in Janaury, ASML CFO Dassen disclosed new U.S. and Dutch export curbs are expected to reduce sales of its mid-range DUV product lines to China by about 10% to 15% this year, after they hit record levels last year. Dassen said the company will not get export licenses for shipment into China for advanced immersion tools like NXT:2000i and up this year, but he still expected demand from China for older tools to stay very solid.

Earlier July, a Bloomberg report said the Biden administration has told allies that it’s considering using the most severe trade restrictions available if companies such as Japanese firm Tokyo Electron Ltd. and ASML continue giving the country access to advanced semiconductor technology. The U.S. was reported to consider whether to impose the foreign direct product rule, or FDPR, which allows the country to impose controls on foreign-made products that use even the tiniest amount of American technology. The U.S. government is presenting the idea to officials in Tokyo and the Hague as an increasingly likely outcome if the countries don’t tighten their own China measures, according to the report.

Reuters reported late July that the U.S. government plans to roll out a new rule this month to expand exports of equipment from some foreign countries to Chinese chipmakers. It was reported that about half of a dozen Chinese semiconductor fabrication factories, which are at the center of China’s most sophisticated chipmaing efforts, will be prohibited from receiving exports from many countries. The new rule will impact exports to China from countries and regions including Taiwan, Israel, Singapore and Malaysia, but shipments from allies that export key chipmaking equipments, including Japan, the Netherlands and South Korea, will be excluded, according to Reuters’ sources.

A spokesperson at the U.S. Department of Commerce later said in a statement that the department is continually assessing the evolving threat environment and updating its export controls, as necessary, to protect U.S. national security and safeguard its technological ecosystem. The person added the U.S. remains committed to working closely with its allies.