In recent years, there has been intense discussion about the ongoing trade war between the US and China. The latest move by the US is to target China’s efforts to establish its own semiconductor production lines, specifically through its technology giant Huawei. The US is aiming to strike at this area indirectly, through other countries that are leaders in the production of semiconductor equipment. The Netherlands has recently taken a stand in this area, following pressure from the US.
The Netherlands and Japan are the countries that export the most important equipment for chip production. Without them, it is impossible to produce chipsets. The Dutch government has announced a series of restrictions on microchip technology, citing national security as the reason. The US had done something similar in the past.
ASML, a Dutch company, is a key player in the market of suppliers of chip production equipment. China has already protested and filed a complaint about this move, citing “export control abuse”. Under the new rules, Dutch companies must apply for licenses to export Deep Ultra Violet lithography technology to certain countries.
Lithography machines use lasers to imprint tiny patterns on silicon, as part of the process of producing microchips. Since 2019, the Dutch government has prevented ASML from selling most of its lithography machines to China. Japan is also preparing similar measures, again under pressure from the US. South Korea has taken a different position, expressing concern about the US’s semiconductor policy. It cited “market uncertainty” as a result of these measures.
Under these circumstances, China is forced to develop its own lithography machines, which may take years and may not guarantee all relevant patents. The ongoing trade war between the US and China has far-reaching implications for the global economy, particularly in the tech industry. The restrictions on microchip technology exports from the Netherlands and Japan could further escalate tensions and lead to a significant impact on the semiconductor supply chain.
