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Beijing Says Dutch Economy to Cripple if it Bans Sales of Chip-Making Equipment to China

By: News Desk

Edited By: Shankhyaneel Sarkar


Last Updated: December 09, 2022, 18:20 IST


ASML Holding logo is seen at company's headquarters in Eindhoven, Netherlands (Image: Reuters)

ASML Holding logo is seen at company's headquarters in Eindhoven, Netherlands (Image: Reuters)

China tried to sound hopeful but the US and the EU feel Beijing’s tech ambitions are a threat to the global economy and security

The Netherlands is planning to introduce new restrictions on exports of chip-making equipment to China, news agency Bloomberg reported citing people familiar with the matter.

The Biden administration continues to pressure the Netherlands to team up with the US in placing restrictions on exports of chip-making equipment citing threat to national security.

Also Read: Biden Hurts Xi’s Tech Ambitions by Targeting Chinese Residents, Green Card Holders Running Chinese Chip Firms

The Netherlands’ ASML Holdings is a global leader when it comes to manufacturing semiconductor production equipment and its trade ties with China are strong as trade reached $2.1 billion in 2021.

However, the US and the West along with several other nations are wary that China wants to dominate the semiconductor-making sector because advanced chips are an integral part of every modern industry and have important roles to play in national security and global economy.

Also Read: New Restrictions in Order as US Takes Aim at China’s Semiconductor Industry Ambitions

The US has targeted China’s semiconductor industry and wants South Korea and Netherlands to team up against China. The Taiwan Semiconductor Manufacturing Co (TSMC) accounts for around half of the global chip market and China’s pursuit for reunification of Taiwan is partially aimed at gaining control of the TSMC.

The Dutch government since 2018 has not granted licences to ASML to export its most advanced technology to China.

These machines are considered ‘dual use’ and have potential military applications.

Also Read: Taiwan Uses Semiconductor Supremacy to Spin Webs around China, Makes it Look Like a Paper Tiger

The Dutch finance minister Liesje Schreinemacher spoke to the US government in November and raised the issue of export restrictions on semiconductor equipment sales to China.

The US and Netherlands could come to an agreement early next year. ASML’s prospects outside China remain strong, experts told news agency Reuters, who also said if Netherlands restricts sale of chip-making equipment it will not surprise markets.

China is the Netherlands’ third-largest trade partner after Germany and Belgium and China is banking on that relationship to ensure that its semiconductor industry is able to fend off the Biden administration’s restrictions and continue production uninterrupted.

State-run Chinese news agency Global Times said that the US was threatening the Netherlands and imposing US hegemony on the semiconductor industry. Chinese experts speaking to the Global Times sounded hopeful that the Netherlands would put forward its own interests rather than the US’.

“The Netherlands is unlikely to blindly bend to the US by weighing its own interests, as the complementary nature of the Chinese and Dutch economies as well as the huge Chinese market will aid the Netherlands’ economic recovery,” the Chinese government mouthpiece said.

Also Read: Xi Arrested Semiconductor Sector Bigwigs as They Failed to Fulfil Vision, Wasted Billions

Bloomberg reported that the Netherlands will restrict equipment maker ASML from exporting its immersion lithography machines, its second-most advanced gear, from being exported to China, which can be used for making 14-nanometer chips or more advanced products.

Experts who spoke to the Global Times said such bans will “cripple the Netherlands’ semiconductor industry and the interest of ASML.”

“China may be the only promising market for ASML, given the overcapacity of chip supply across the world,’ the experts added.

However, China could be surprised as its growing closeness to Russia is concerning for the EU. The US and its allies in Europe agree that Chinese tech ambitions pose threat to the EU and the world’s security and prosperity.

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first published:December 09, 2022, 17:53 IST
last updated:December 09, 2022, 18:20 IST
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