The United States government is reportedly pushing the Dutch semiconductor manufacturing equipment provider ASML Holding NV to stop selling any more of its gear to Chinese chipmakers.

A report from Bloomberg today says the U.S. government is intent on curbing China’s rise in matters of chipmaking technology. To that end, it’s seeking to expand an existing moratorium on the sale of advanced chipmaking systems to Chinese firms.

U.S. officials are reportedly pressing their counterparts in the Netherlands. If the Dutch government agrees to their demands, it would “significantly broaden” the range of chipmaking equipment that’s forbidden to be sold to China.

ASML is the world’s leading supplier of lithography machines that play a crucial role in the chipmaking process. The Dutch firm dominates the world’s market for this kind of equipment, so any ban on it dealing with China would seriously undermine the Asian country’s ambitions to become self-sufficient in the production of critical electronic components.

Chinese chipmakers Semiconductor Manufacturing International Corp. and Hua Hong Semiconductor Ltd. are both said to be major customers of ASML. Although they have already been prevented from purchasing the Dutch firm’s most advanced technology, they are still allowed to buy some of its older deep ultraviolet lithography machines. These DUV systems are a generation behind ASML’s cutting-edge gear but still widely used to make less powerful computer chips used in cars, phones, computers and robotics.

ASML is already unable to ship its most advanced EUV lithography machines, which cost about $164 million each, to China because it cannot obtain an export license from the Dutch government, the report said.

Bloomberg said the call to prevent China from acquiring the older DUV systems came in early June during a visit to the Netherlands by U.S. Deputy Commerce Secretary Don Graves. It cited anonymous sources who said Graves visited ASML’s corporate headquarters in Veldhoven and met with its Chief Executive Peter Wennink.

So far, the Dutch government has not yet agreed to any additional restrictions on ASML’s exports to China. Doing so would likely harm the country’s trade ties with China, Bloomberg added.

“The discussion is not new,” a spokesperson for ASML told Bloomberg. “No decisions have been made and we do not want to speculate or comment on rumors.”

Constellation Research Inc. analyst Holger Mueller said the U.S. move illustrates how trade wars and embargoes can be very difficult to enforce in today’s global economy. Although the U.S. is dead against the sale of older lithography machines to China, the Dutch government apparently doesn’t agree.

“It all comes back to the value of these machines, and the Dutch and U.S. governments see things differently,” Mueller said. “While the Dutch seem to be OK with selling to China, the U.S. clearly is not. That’s likely because older chips can still be very capable and do a lot of damage, as the war in Ukraine shows. It’ll be interesting to see how this is resolved.”

Charles King of Pund-IT Inc. told SiliconANGLE that the U.S.’s move could be seen as a relatively typical economic power play by a nation that has its own interest in the chipmaking industry, acting as a spoiler of China’s rival technology and manufacturing plans.

“On the other hand, this can be interpreted as the U.S. government working to deliver a solid slap to a government which regularly places its own ambitions ahead of global consensus-building,” King added. “If this effort succeeds, it will be a serious blow to the PRC’s Made in China 2025 plans.”

The U.S. is also said to be trying to apply pressure on the Japanese government to prevent Nikon Corp. from selling similar machines to Chinese chipmakers, Bloomberg’s sources said. Nikon reportedly rivals ASML in the market, though it is a far smaller player. In 2021, it sold four DUV systems to Chinese firms, far fewer than the 81 machines sold by ASML that year.

Photo: ASML