Dutch Government Reclaims ASML Export Control from US

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Key Takeaways

  • The Dutch government has expanded export licensing control over ASML's 1970i and 1980i DUV tools.
  • This move restores oversight of ASML’s tools to the Netherlands from the U.S., addressing concerns over technological security.
  • ASML does not expect the change to impact earnings for 2023 or beyond despite shares dropping 1.6% after the announcement.

The Dutch government has taken back control of the export licensing of ASML’s critical chip-making equipment, reversing the United States’ prior oversight.?

Restoring Dutch Sovereignty Over ASML Exports

The Dutch government’s decision, announced on September 6, signals a shift in how the U.S. and the Dutch will regulate ASML’s Deep Ultraviolet (DUV) lithography tools, which are essential to the global semiconductor industry.

These machines, specifically the 1970i and 1980i models, had previously been unilaterally regulated by the U.S. as part of its ongoing efforts to restrict Chinese firms’ access to advanced chip technology.

In a statement, ASML, Europe’s largest technology firm, expressed confidence that the new regulations would not affect its financial performance this year or in the foreseeable future.

However, the market’s reaction hasn’t been positive. ASML shares traded down 1.6%, reflecting concerns over the regulatory changes.

Dutch Trade Minister Reinette Klever emphasized that the decision was necessary for national security. “I’m making this decision for our safety,” she said, pointing to the evolving risks associated with technological advancements in chip-making equipment.

The machines in question—ASML’s 1970i and 1980i DUV tools—are in the middle of the company’s product range, with more advanced Extreme Ultraviolet (EUV) tools still restricted from export to China.

Since September 2023, the Netherlands had imposed export licenses on ASML’s NXT:2000 series of DUV tools. The U.S. subsequently imposed a ban on shipping ASML’s 1970i and 1980i models from October 2023, citing the presence of American-made components that necessitated stricter controls.

Notably, ASML’s lithography machines play a crucial role in the semiconductor manufacturing process, using lasers to wire intricate circuitry onto chips.

These advanced machines are key to producing cutting-edge chips central to many modern technologies, including smartphones, artificial intelligence, and 5G networks.

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