Chipmaker ASML wants the US to shut down factories in China

Just as tensions between China and the US were easing after months of war games and aggressive rhetoric, one of the world’s most important technology companies is asking the US to shut down some of its operations in China. Dutch chip equipment maker ASML, the only supplier of a machine crucial for the production of high-end chips, said Washington has pressured it to halt shipments to its Chinese fabrication facilities, where its production lines are currently being installed.<br><br>While China has offered the US giant an alternative, ASML has chosen to “comply with the US regulations” and shut down the enactment of the machines there. Chip manufacturers in China can still buy its machines, but have to set them up outside of the country, which would add to costs and logistical challenges.<br><br>This is part of a wider strategy by the US to isolate China in the global tech competition. In October, the Biden administration announced sweeping restrictions on the sale of cutting-edge chips and chip-making technology to China. If China is not allowed to import top-of-the-line chips or manufacture its own, it has to buy chips and equipment from other countries, which would hinder its goal of becoming a global technology superpower.<br><br>ASML has become a key player in the global chip war between China and the US. In recent years, China’s SMIC, Hwatsing, and other companies have been working with ASML to build up their production capabilities. Before the restrictions were imposed, the Dutch company was expected to sell a significant volume of its high-end chip-making machines, called extreme ultraviolet (EUV), to Chinese chip manufacturers. But the US export bans have made that impossible.<br><br>By shutting down its production facilities in China, ASML is highlighting the significant risks and challenges that accompany the country’s push for self-reliance in the semiconductor industry. China wants to make its own high-end chips, and it needs EUV machines for that, but by complying with the US ban, ASML is depriving it of a critical technology.