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  November 28th, 2022 | Written by

Dutch Resist US Call to Ban more Chip Equipment Sales to China

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The Netherlands will defend its economic interests when it comes to the sales of chip equipment to China, a senior Dutch official said, further evidence of the country’s resistance to meekly following Washington’s attempts to cut off China from semiconductor technology.

The European country is home to ASML Holding NV, which dominates the market for one-of-a-kind, cutting-edge chipmaking equipment that has become a focus of the US government’s attempts to limit China. Dutch Foreign Trade Minister Liesje Schreinemacher told lawmakers on Tuesday that the Netherlands will make its own decision regarding ASML’s chip gear sales to China amid trade rule talks with the US and other allies.

Deep ultraviolet systems are the second-most-advanced chip production machines that Veldhoven, Netherlands-based ASML manufactures, and the equipment is required to make a wide range of semiconductors.

Schreinemacher’s comments appeared to indicate growing Dutch objections to the US call for the Netherlands to align with Washington on export controls to undermine Beijing’s ambition in building a chip industry at home and improve its military capabilities. The European country wants to maintain access to China as a major market.

Last week, the Dutch minister said the US shouldn’t expect the Netherlands to unquestionably adopt its approach to China export restrictions.

While ASML hasn’t sold any of its most advanced extreme ultraviolet lithography machines to China because the Dutch government has refused to grant it a license under US pressure, the company can still sell less sophisticated chipmaking systems to the Asian country.

However, US officials have been pressuring the Dutch government to ban the sales of immersion lithography machines, the most advanced kind of gear in ASML’s deep ultraviolet lineup, Bloomberg News has reported. The Biden administration has been working to get allies including the Netherlands and Japan to adopt the sweeping measures it unveiled in early October to ban more chip machines for China.

The Netherlands is key to the struggle because ASML is one of a handful of companies that dominate the market for semiconductor-manufacturing equipment. Its peers include Applied Materials Inc., Lam Research Corp. and KLA Corp. in the US, and Tokyo Electron Ltd. in Japan.

Senior US officials — including Alan Estevez, the undersecretary of commerce for industry and security — are traveling to the Netherlands this month to discuss export controls. But an immediate accord isn’t expected to come out of the talks, Bloomberg News has reported.

EU negotiators are working on a number of contentious trade issues with Washington. Countries, most vocally France, have said the measures could damage European economies and have raised the possibility of filing a complaint with the World Trade Organization.

These issues will be a topic of conversation early next month at the Trade and Technology Council, a high-level meeting between EU and US officials.

Meanwhile, China is working to ensure other countries don’t cave to US demands. In a Group of 20 summit meeting last Tuesday, Chinese President Xi Jinping urged Dutch Prime Minister Mark Rutte to avoid disrupting global trade.