Chipmaking Giant ASML at the Heart of U.S.-China Tech Battle: Export Bans and Global Implications

Zinger Key Points
  • ASML faces scrutiny as China's Minister of Commerce raises concerns about halted exports amid U.S. pressure.
  • Netherlands blocks critical lithography system exports, aligning with U.S. restrictions. Chinese firms repurpose gaming cards for AI.

ASML Holding N.V. ASML, a Dutch firm specializing in advanced chipmaking technology, faced increased scrutiny in U.S.-China relations as China's Minister of Commerce, Wang Wentao, expressed "grave concerns" to U.S. Commerce Secretary Gina Raimondo during a recent call. 

Wang's concerns revolved around U.S. efforts to pressure ASML into expediting the cessation of some lithography machine exports to China, a move that the U.S. Commerce Department initiated. 

This development came as ASML canceled shipments of high-end products to China, complying with U.S. directives, Bloomberg reports.

In 2024, the Netherlands blocked the export of critical lithography systems, including the NXT:2050i and NXT:2100i, which are essential for advanced microprocessor manufacturing. 

Additionally, during the conversation, Wang discussed the ongoing survey by Raimondo's department, which aims to assess American firms' reliance on Chinese-produced chips across various industries. U.S. officials were contemplating imposing tariffs on low-priced Chinese chips to safeguard advanced technology from the Chinese military's hands. 

However, these measures also presented challenges for Chinese companies seeking access to cutting-edge technology.

This exchange marked the second public communication between Wang and Raimondo since Raimondo's visit to China in August. 

During her visit, Huawei Technologies Co surprised observers by launching the Mate 60 Pro handset, equipped with an advanced chip produced in China—a move contradicting the sanctions intended to prevent such developments. 

Raimondo expressed dissatisfaction with the timing and pledged to take strong measures to protect U.S. national security.

Earlier in the year, Raimondo's email was compromised in a cyberattack that Microsoft Corp MSFT attributed to China. 

She later conveyed her concerns to Chinese officials, emphasizing that the incident had eroded trust between the two nations.

Despite these challenges, both countries' leaders have made efforts to signal a desire for improved relations, with President Joe Biden expressing a willingness to support China's economy and President Xi Jinping advocating for "peaceful coexistence" between the world's two largest economies. 

Meanwhile, Nvidia Corp NVDA faces challenges due to U.S. export controls on advanced semiconductors to China, leading Chinese companies to repurpose standard PC gaming graphics cards for artificial intelligence (AI) development. 

However, these repurposed chips lack the precision required for training some large AI models. 

Reports suggest that Chinese cloud companies, which currently source about 80% of high-end AI chips from Nvidia, could significantly reduce their orders by 50%-60% within five years, affecting Nvidia's business in China.

Price Actions: ASML shares traded lower by 0.07% at $717.28 on the last check Thursday.

Also Read: Lam Research, ASML Lead Surge In Revenue From China Despite US Trade Curbs

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Company

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