Europe Joins The US In Its Chip War With China

The largest producer of sophisticated chipmaking technologies in Europe has joined the United States in its increasingly heated confrontation against China.  In a letter to parliament on Wednesday, the Dutch trade minister stated that additional limitations on the export of semiconductor technology were necessary to safeguard national security.

The letter avoided mentioning Europe’s largest tech firm, ASML Holdings, but the Dutch company will be impacted by the restrictions as it is a major supplier to international chipmakers, including those in China. The announcement represents the Netherlands government’s first visible step toward adopting the regulations proposed by Washington to impose limitations on China’s chip manufacturing sector.

According to a CNN report, a familiar source has revealed that Japan has also engaged in joint consultations with the Netherlands and the United States. According to Reuters, Tokyo is anticipated to provide an update on its export regulations for chip equipment as soon as this week.

China declared on Thursday that it “firmly opposes” the Dutch government’s impending restrictions, which come only a few months after the United States limited Beijing’s access to some semiconductor equipment. Washington requires other significant suppliers, located in the Netherlands and Japan, to join for those restrictions to be meaningful.

Speaking on behalf of the Chinese government, Mao Ning condemned “certain countries” for pressuring and persuading other nations to impose export restrictions on China at the expense of their allies’ interests. Although she didn’t specifically mention the United States, Chinese officials are frequently known to refer to “some countries” when criticizing Washington. “We hope the Netherlands won’t follow some countries in abusing export control measures,” Mao warned. In order to safeguard its legitimate rights and interests, China “would take all necessary countermeasures,” she added. 

In unusually blunt words this week, Chinese leader Xi Jinping slammed the United States and urged China’s private businesses to “battle” with the Communist Party in light of the country’s growing challenges. He claimed that the United States and other Western nations were attempting to “contain” and “suppress” China. In several areas, including artificial intelligence, 5G wireless technology, and quantum computing, Beijing has set the goal of China becoming a global leader.

When the Biden administration barred Chinese corporations from acquiring sophisticated chips and chip-making technology without a license in October, these plans ran into a significant roadblock. Additionally, it restricted American citizens’ support to select Chinese manufacturing locations where chips were being developed or produced. Chips are essential for everything from cell phones and autonomous vehicles to high-end computing and the production of weapons.

ASML is a market leader in the creation of lithography equipment, which uses light to print designs on silicon. The Dutch company’s machinery is used to mass-produce microchips by clients like TSMC, Samsung, and China’s SMIC.

“These new export controls focus on advanced chip manufacturing technology, including the most advanced deposition and immersion lithography tools,” ASML said in a statement. “Due to these upcoming regulations, ASML will need to apply for export licenses for shipment of the most advanced immersion … systems.”

It further stated that it didn’t anticipate the impending steps to materially alter its 2023 financial forecast. China has been the company’s key market for “mature” products.