Home Society Restrictions made China stronger: is trying to slow down technological process even feasible?

Restrictions made China stronger: is trying to slow down technological process even feasible?

The US is increasingly trying to gain control over exporting ASML’s essential chip machines. That is the feeling that is now alive in Veldhoven, where the company is located. The cause is new restrictions of the Americans last month, who were received with frustration by the chip machine giant.

There is a chance that it will not stop there. The fact that new restrictions were not surprising. Washington has talked about it in advance in The Hague and ASML knew about it. The House of Representatives also showed critical at the end of October, when it was about it in Question Time.

The new measures come a year after the U.S. first took far-reaching steps to counter China’s technological development as much as possible. Those technologically furthest have military superiority is the reasoning. America is doing everything in its power to prevent China from becoming more powerful.

Holes to close

“The update is designed to go all-in and close all the gaps in the regulations,” said Emily Benson of the American think tank CSIS. “In the long term, these measures can have a very significant impact on China’s capabilities.”

The U.S. saw such a hole in the export of ASML’s chip machines. The very latest machines, EUV (Extreme Ultraviolet), has never been allowed to export to China. After intensive negotiations, the Dutch government agreed to extra measures at the beginning of this year, aimed at three models of the older DUV machines (Deep Ultraviolet). These are machines that are already in China. Two more older models have now been added.

This has created a remarkable difference between the Netherlands and the US: from The Hague ASML is allowed to ship more machines than from Washington. The government there has adjusted the rules, so that if there is a US screw in alone, they claim control over the export of the machine (formerly that threshold was 25 percent and ASML does not arrive there).

The chip machine maker is not happy about that. Moreover, it raises the question of whether America will also target other companies in the chip sector or beyond this way.

It is expected that the latest step will be held at the diplomatic level between Washington and The Hague between Washington and The Hague. , but whether they will yield something, is the question. Outgoing Minister Schreinemacher (Foreign Trade) has also announced that he will go to Brussels.

A month earlier, the Chinese manufacturer Huawei came with a surprise. The company, which has been on the blacklist of the US since 2020 that would prevent it from advanced chips, had a new phone with an advanced 5G chip.

The chip was made at 7 nanometers (nm) at Chinese manufacturer SMIC, on an ASML DUV machine and a series of machines from other companies. Something that all those parties have no influence on, since the customer determines what is produced.

The number of nanometers indicates development in the chip sector. The smaller the number, the faster and more energy-efficient the chip. The development is already further: with ASML’s EUV machines, the Taiwanese manufacturer TSMC chips are produced at 3 nm. They are in the latest iPhone.

The fact that a Chinese manufacturer can produce 7 nm on a large scale was to be expected, says Jan-Peter Kleinhans of the German think tank Stiftung Neue Verantwortung. “TSMC did this five years ago and we knew SMIC was working on it.”

The only way the US could further slow down production is through the so-called maintenance contracts that ASML has with manufacturers in China. They are vital: without such contracts, the machines stop working after a few weeks or months, depending on the type. Missing one part can be fatal.

“I assume that the U.S. does not allow the ASML to continue maintenance of newer machines in China,” Kleinhans said. “The big question is how the American and Dutch governments will deal with this.” The government wants to look at this on a case-by-case basis, in order to prevent problems in the wider chip chain. The expectation is that ASML will notice something.

Kleinhans estimate that 7 and 6 nm chips are the last that China will be able to make on a large scale. He calls 5 nanometers and smaller without the EUV very difficult.

About the author: Rick Culpepper

Rick Culpepper is of those journalists who dig the topic to the very bottom. He is often late with the delivery of the piece, but always does it perfectly. In his spare time, he collects data for one of the most high-profile investigations of corruption in the EU.

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