ASML's China Dilemma: Diplomatic and Business Headaches for the Netherlands
Dutch Prime Minister Downplays Pressure from Biden Administration
New Export Controls Restrict ASML's Shipments to China
The Netherlands is facing a diplomatic and business headache as the Biden administration presses the Dutch government to stop its top chipmaking equipment maker, ASML, from servicing some tools in China.
Dutch Prime Minister Mark Rutte has downplayed the conflict between the Netherlands and China over the restrictions, emphasizing that the Netherlands has "no problem" with China and values its cooperation.
However, the Netherlands has published new export controls that will further restrict ASML's chipmaking machines from being sent to China, siding with the United States in the geopolitical tussle over control of critical technology.
ASML has been ordered by the Dutch government to restrict shipment of some of its chip-making equipment to China, after the United States ramped up pressure to block the company from servicing machines sold before limits on sales were imposed.
The Netherlands' decision has drawn warnings from China, which has urged the Netherlands to respect market principles and warned that the move would hurt the relationship between the two countries.
China was ASML's second market in 2023 after Taiwan, with the company facing increasing restrictions on exports to China from the Dutch and American governments.
ASML, the Netherlands-headquartered company behind critical chipmaking tools, is expected to need new licenses to export to Chinese companies, further limiting its ability to repair restricted machines in China.
The US pressure is increasing the Netherlands' entanglement in an escalating geopolitical race, with the Biden administration urging the Netherlands to stop ASML Holding NV from servicing and repairing sensitive chip-making equipment that Chinese clients purchased before limits on sales of those tools were imposed.
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