By Toby Sterling
In a recent clarification, the Dutch government stated that ASML needs a license to provide spare parts and software updates for computer chipmaking equipment previously sold to Chinese customers. This requirement is due to export restrictions that now apply to the equipment. The Dutch government added two additional tools to its national control list to align its policy with the United States.
There was confusion surrounding whether ASML, Europe's largest technology firm, would face additional servicing restrictions. However, the Foreign Ministry clarified that servicing, which includes parts, software, and technology developed for the equipment, is subject to the licensing requirement. This obligation will expand to include ASML's 1980di and 1970di machines by September 6, 2024.
ASML, anticipating these changes, stated that it does not expect the new requirements to impact its earnings. The Chinese government has protested against U.S.-led export controls, emphasizing the need to protect the interests of Chinese and Dutch firms.
ASML is a key player in the market for lithography tools, crucial for chipmakers in creating chip circuitry. Following earlier restrictions in 2023, ASML informed its Chinese customers not to expect licenses to import its most advanced DUV tools after January 1, 2024.
The Dutch government closely collaborates with the United States on export policy, citing Chinese support for Russia in the Ukraine conflict as a significant security concern. ASML's CEO, Christophe Fouquet, anticipates further restrictions on exports to China from the U.S. government, regardless of the outcome of the upcoming presidential election.
Fouquet also expects pushback from the Dutch government against additional U.S. restrictions, noting that these measures are increasingly driven by economic rather than security considerations.
Analysis:
In summary, ASML, a leading technology firm, must now obtain licenses for providing spare parts and software updates for chipmaking equipment sold to Chinese customers. This requirement stems from export restrictions imposed by the Dutch government in coordination with the United States. The Chinese government has expressed dissatisfaction with these controls, emphasizing the need to safeguard the interests of Chinese and Dutch companies.
ASML, a dominant player in the lithography tools market, faces challenges in its Chinese market due to these restrictions. The company's CEO expects further limitations on exports to China, driven by political and economic factors. This situation highlights the complex interplay between global trade policies, security concerns, and economic interests, which can impact companies and markets worldwide.