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The United States and the Netherlands will hold a new round of negotiations on restricting China's access to advanced chip technology this month

Feb 02 109
According to Bloomberg, the United States and the Netherlands are expected to hold a new round of negotiations this month to restrict China's access to advanced chip technology. During this period, the United States will increase pressure on its allies to prevent ASML from supplying to China.

According to insiders, Tarun Chhabra, a senior official of the National Security Council of the United States, and Alan Estevez, the Deputy Minister of Commerce in charge of industry and security, will go to the Netherlands for discussion.

People familiar with the matter said that since the United States has been pressing the Dutch government to stop selling more advanced chip production machines to China, the two sides will discuss expanding export controls, although they do not expect to reach an agreement. According to a person familiar with the matter, the visit is part of ongoing bilateral consultations, and the two sides will also discuss other issues in the US Netherlands science and technology partnership.

The US National Security Council, the US Department of Commerce and the Netherlands Ministry of Foreign Trade and Development Cooperation declined to comment on this.

ASML has not sold its cutting-edge extreme ultraviolet (EUV) lithography system in China, but the United States has been promoting the ban to extend to more mature technologies.

ASML is the key to the global chip industry with a value of 550 billion dollars. It is a unique machine manufacturer. Without it, it cannot manufacture the most advanced semiconductors. Washington needs this company to join in and exert maximum pressure on China.

The global chip equipment market is dominated by three American suppliers - Applied Materials, Lam Research Corp. and KLA Corp. - as well as ASML in the Netherlands and Tokyo Electronics Co., Ltd. in Japan.

Although non US companies have more freedom to do business with China than their US counterparts, they are subject to strict regulatory restrictions, which limit the products they can sell to Chinese customers. After Washington introduced new rules on October 7 to further restrict the ability of American equipment suppliers to conduct business in the country, the gap has widened.

ASML was unable to obtain the approval of the Dutch government to sell its most advanced EUV machines to China, but so far, it can continue to sell its other products to Chinese customers, and is less affected by the new US export controls than its US counterparts.

US officials have said that if their allies do not join the movement, their latest round of trade restrictions will expire over time. Bloomberg reported earlier this year that they have also been pushing ASML to stop selling immersion lithography machines to China, which is the second most advanced product after EUV.

Estevez of the US Department of Commerce said last week that he expected to reach an agreement with global allies to restrict the export of chip production equipment to China in the short term.