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China Responds to Potential Broader Ban on Asml’s Chip-making Gear

Chinese Foreign Minister Qin Gang talked over phone with Dutch Deputy Prime Minister and Foreign Minister Wopke Hoekstra on Monday for an in-depth exchange of views on bilateral relations and other issues, Chinese Foreign Ministry spokesperson Mao Ning said Tuesday.

Mao made the remarks at a regular press briefing in Beijing when asked about China’s response to media reports that the Netherlands will also ban the sale of deep ultraviolet (DUV) machines – the slightly older yet more widely-used chip making equipment – to the Chinese mainland.

ASML, the world’s top supplier of cutting edge chip-making machines based in the Netherlands, has already been prohibited from selling its most advanced extreme ultraviolet (EUV) lithography machines to the Chinese mainland since 2019 under a U.S. export ban.

The U.S. has been lobbying its allies, including the Netherlands and Japan, to also stop selling their DUV machines to the Chinese mainland.

During Monday’s phone talk, Qin said that openness and pragmatism are the defining feature of China-Netherlands relations, and both sides need to work for stable international industrial and supply chains, and promote an open and orderly international trade environment rather than a fragmented and chaotic one.

For his part, Hoekstra said that the Netherlands stands ready to advance its open and practical comprehensive cooperative partnership with China, adding that the Dutch side will continue to handle economic and trade affairs with China in a responsible manner.

“As we have stressed before, certain country has been pursuing its selfish agenda at the expense of countries that it calls allies and friends. It has deliberately blocked and suppressed Chinese companies and forcibly pushed for industrial relocation and decoupling,” said Mao.

“Such bullying and hegemonic practices seriously violate market rules and disrupt the international trade order,” she said, adding that such behaviors not only harm the legitimate and lawful rights and interests of Chinese companies, but also destabilize the global industrial and supply chains.

She called on all parties to take an objective and fair stance, make independent decisions in light of their own long-term interests and in the interest of a fair and equitable marketplace.

ASML displays its chip making equipment at the 5th China International Import Expo in Shanghai, China, November 7, 2022. /CFP

Chinese mainland accounts for 14% of ASML’s total revenue in 2022

In 2022, ASML sold products worth 2.16 billion euros (about $2.34 billion) to the Chinese mainland, which accounted for 14 percent of the company’s total revenue, according to its full-year financial report released on January 25.

The Chinese mainland was ASML’s third-largest market behind China’s Taiwan region, where chip making giant Taiwan Semiconductor Manufacturing Company is based, and South Korea, which owns large chip makers like Samsung and SK Hynix.

Following the release of the company’s financial results last month, ASML CEO Peter Wennink said “nothing has changed” regarding ASML’s exports to China despite the U.S. imposing new export restrictions on its own companies in October 2022.

“We just have to wait for the governments and the politicians to keep talking and come to a reasonable solution (on possible restrictions),” Wennink was quoted as saying by Reuters. 

ASML will continue to engage with the authorities to inform them about the potential impact of any proposed rule in order to assess the impact on the global semiconductor supply chain, the company said in a statement sent to Global Times.

“What we need now is stability and reliability in our industry to avoid further disturbances in the global semiconductor industry,” it was quoted as saying.

Source: news cgtn