Europe's Most Valuable Tech Company Tries To Avoid the Chip War (bloomberg.com) 77
An anonymous reader quotes a report from Bloomberg: As the US escalates its campaign to undermine the Chinese semiconductor industry, Europe is trying -- with some success -- to avoid becoming collateral damage. At the center of the maneuvering is ASML, the Dutch manufacturer of chipmaking equipment and Europe's most valuable tech company. It's one of the very few producers of the sophisticated lithography machines needed to make midgrade semiconductors, and the only manufacturer of the equipment needed to make the most cutting-edge chips. That puts ASML in the spotlight for policymakers. ASML has never sold its extreme ultraviolet lithography machines, or EUVs, to Chinese clients. The Biden administration, as part of its attempt to keep China from developing the capability to make advanced semiconductors, has been trying to push the Dutch government to withhold ASML's older machines called immersion deep ultraviolet lithography machines, or DUVs, that can be used in combination with other technology to make advanced chips.
The European Commission, as well as the Dutch and German governments, have undertaken a coordinated lobbying campaign to oppose restrictions on a critical European company while US competitors continue to do business with Chinese companies, according to officials who spoke under the condition of anonymity because the talks are sensitive. They've argued in part that such restrictions are now pointless given that ASML, which generated 15% of its revenue in China last year, has already sold many of these machines to Chinese companies. When the US did push ahead in early October with more severe restrictions against doing business in China, its specific policies came as a relief to ASML and its political supporters. ASML wasn't hit directly by the new restrictions, which did make it harder for its US peers, such as Applied Materials and Lam Research, to sell advanced chip gear to China. Both companies warned investors that the new restrictions would significantly affect their financial performance.
The US Department of Commerce, which is responsible for the majority of rulemaking and enforcement, won't comment directly on specific companies or its negotiations with other governments. ASML is not an American company, limiting the US's power over its operations. But it commonly uses parts from the US, which gives Washington a degree of leverage. In the past, export controls have applied to products when at least 25% of their components are sourced from the US. But senior US officials now say products that contain any US components or intellectual property could be subjected to Washington's export approval process. Such a broad interpretation of the rules would be difficult for a company like ASML to work around. "Europeans feared the new US policy would include provisions affecting immersion DUVs," adds Bloomberg. According to SML's chief executive officer, Peter Wennink, the company's initial assessment is that the new restrictions don't apply to ASML's products shipped out of the Netherlands. Roger Dassen, the chief financial officer, also said the direct impact is fairly limited, thanks to "the fact that we are a European company with limited US technology in it." However, Bloomberg notes ASML's shares "dropped as much as 19% in the days after the Oct. 7 announcement, although they partially recovered after it posted strong earnings."
"The US runs the risk of setting off a confrontation with Europe if it chooses to go ahead with new restrictions on immersion DUV machines," concludes the report. "It's unclear what chance officials have to convince their Dutch counterparts to impose additional restrictions on DUV sales, but there's little doubt the two allies aren't yet on the same page. China is the Netherlands's third-biggest trading partner after Germany and Belgium."
The European Commission, as well as the Dutch and German governments, have undertaken a coordinated lobbying campaign to oppose restrictions on a critical European company while US competitors continue to do business with Chinese companies, according to officials who spoke under the condition of anonymity because the talks are sensitive. They've argued in part that such restrictions are now pointless given that ASML, which generated 15% of its revenue in China last year, has already sold many of these machines to Chinese companies. When the US did push ahead in early October with more severe restrictions against doing business in China, its specific policies came as a relief to ASML and its political supporters. ASML wasn't hit directly by the new restrictions, which did make it harder for its US peers, such as Applied Materials and Lam Research, to sell advanced chip gear to China. Both companies warned investors that the new restrictions would significantly affect their financial performance.
The US Department of Commerce, which is responsible for the majority of rulemaking and enforcement, won't comment directly on specific companies or its negotiations with other governments. ASML is not an American company, limiting the US's power over its operations. But it commonly uses parts from the US, which gives Washington a degree of leverage. In the past, export controls have applied to products when at least 25% of their components are sourced from the US. But senior US officials now say products that contain any US components or intellectual property could be subjected to Washington's export approval process. Such a broad interpretation of the rules would be difficult for a company like ASML to work around. "Europeans feared the new US policy would include provisions affecting immersion DUVs," adds Bloomberg. According to SML's chief executive officer, Peter Wennink, the company's initial assessment is that the new restrictions don't apply to ASML's products shipped out of the Netherlands. Roger Dassen, the chief financial officer, also said the direct impact is fairly limited, thanks to "the fact that we are a European company with limited US technology in it." However, Bloomberg notes ASML's shares "dropped as much as 19% in the days after the Oct. 7 announcement, although they partially recovered after it posted strong earnings."
"The US runs the risk of setting off a confrontation with Europe if it chooses to go ahead with new restrictions on immersion DUV machines," concludes the report. "It's unclear what chance officials have to convince their Dutch counterparts to impose additional restrictions on DUV sales, but there's little doubt the two allies aren't yet on the same page. China is the Netherlands's third-biggest trading partner after Germany and Belgium."
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Only by population. In terms of spending, however:
https://www.visualcapitalist.c... [visualcapitalist.com]
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Yes. Because literally no one can ever win from the US in spending on the military.
Now if we'd actually use the number the US spends "For NATO", instead of just to keep their military machine running, then they'd of course still be number one.
Things are slowly changing, however. The EU is starting to realize that the US is at best an unreliable ally, and at worst an actual threat.
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The EU is starting to realize that the US is at best an unreliable ally, and at worst an actual threat.
you wish. how is the eu starting to realize that when the overwhelming majority of elected officials, lobbies and media are parroting eu war propaganda all day long and governments resurrect nato which was useless and practically defunct less than a year ago, before they played into this new us' world hegemon game?
the sad thing is, obnoxious and dangerous as this game is, the eu doesn't really have much alternative than to bend over, we are irrelevant already.
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all that's just collateral damage. there is no conspiracy because europe simply isn't relevant for anyone to bother, don't worry about patterns, it's way too late. we screwed up a long time ago, we have zero influence in the new world order and this time around we will just provide the battleground and the bulk of the losses. oh wait ...
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One would hope that they remembered they already "picked a side" by joining NATO in the first place. And NATO has been expanding its membership. It's not like its importance is somehow waning.
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And NATO has been expanding its membership.
Precisely.... like in 2008 when they announced that Ukraine would join (not maybe, not after changes. It was a certainty) NATO while, at the same time, the US was calling it a "Kleptocracy".
Now, why the fuck would NATO want a "Kleptocracy" as a member? One reason and one reason only. To irritate Russia.
17 years prior.. 1991... James A Baker III promises Russia, just prior to the dissolution of the Soviet Union, that NATO would "not expand 1-inch eastward".
How many NATO countries border Russia today?
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Or Russia could just ignore NATO and mind its own damn business.
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Or Russia could just ignore NATO and mind its own damn business.
Right.. Like we did when the Soviets tried to arm Cuba....
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That's rich.
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Europe screwed things up multiple times back when they were running the world. All the US has done wrong is bring the world close to a nuclear apocalypse.
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You'd have to look back further than that in order to understand the changing world around you.
Re:How about ASML not sell the machines to the US. (Score:4, Insightful)
The main reason the US is in the position it is in, is actually really simple. They didn't get bombed back to the stone age in World War II, and came out of that with all their manufacturing not only intact, but running very well.
Read a history book (Score:2)
The US took over world banking during WW1 and the inter-war period. Europe borrowed to fight WW1 and to borrowed more rebuild. The US siphoned capital from multiple empires and used it to fund infrastructure and investment. It's not something we can repeat easily, so expect there to be no going back to the good old days once we lose our economic dominance in the world.
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this is sadly true. and us is next in the line of decadent empires to collapse, so take good notice ... :p
Re: How about ASML not sell the machines to the U (Score:2)
That's odd (Score:1)
Re:That's odd (Score:5, Insightful)
The European Union has never had one problem with regulating American companies.
The EU tries to regulate how American companies behave in the EU.
America tries to regulate how EU companies behave worldwide.
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The US, specifically, tries to bully all kinds of companies all over the world to only do business that the US profits from.
it's not the US, it's the transnational global corporations owned by a global upper class that are headquartered in the US, but not always,
this isn't nationalism, this is classism
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The European Union has never had one problem with regulating American companies.
The EU tries to regulate how American companies behave in the EU.
America tries to regulate how EU companies behave worldwide.
Well, not completely. For instance - the demand that Apple make connectors that bend the knee to the EU regulators has caused me to buy new cables right here in the USA to fit that mandate. The chargers are different, the cables are different. More than once I've taken the wrong cable in the car to hook up to CarPlay. Because it is shortsighted, and assumes that there is not one other thing that a cellphone does other than attach to a EU mandated charger.
Re: That's odd (Score:3)
Re: That's odd (Score:1)
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US is having more and more trouble controlling the world. Maybe that is not necessarily bad... Let it go...
Who do you want controlling the world? Someone will, if not the USA, I'm certain that some benevolent outfit will.
Re: That's odd (Score:1)
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Apple are free to sell products that don't comply with EU regulation outside the EU. Companies are NOT free not to comply with American sanctions outside of America.
Of course they are free to do as they wish. If the EU wants to sell these machines to China, or even sell brand new state of the art machines, we can't stop them. We can apply pressure, but last time I checked, we weren't planning on enforcing our wishes are the point of a gun.
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We can apply pressure
Which is such a great thing to do to people you claim to be friends or allies of.
Why not try to make deals, instead of threats?
The PRC claims to make deals that are mutually beneficial. The West can do one better and actually make mutually beneficial deals with each other instead of trying to find ways to stab each other in the back.
we weren't planning on enforcing our wishes are the point of a gun.
Economic and political guns.
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The US uses the US Dollar to extend jurisdiction world-wide. Being the premier reserve currency and the basis of many international financial transactions, they claim jurisdiction over anyone who uses it. While it may be difficult for them to actually prosecute people outside the US, we have seen them try to. A recent example was one of the C level execs at Huawei, who was arrested in Canada because the US wanted to extradite her for something that happened in Hong Kong.
The EU has been working to make the E
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Companies are NOT free not to comply with American sanctions outside of America.
Yes they are. Sanctions are something that applies to specific people / companies in very specific circumstances. If you're an American company incorporated in America you need to comply with sanctions outside of America. If you're an international company incorporated in say ... The Netherlands, and you have an office in America, then
a) *that office* needs to comply with American sanctions,
b) US citizens in that office or abroad need to comply with American sanctions, and
c) foreign nationals on US soil (su
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Tell that to Meng Wanzhou, who was arrested in Canada for something she allegedly did in Hong Kong.
The US had her arrested because it wanted to extradite her.
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Tell that to Meng Wanzhou, who was arrested in Canada for something she allegedly did in Hong Kong.
No need. It's not relevant to her case. Wanzhou was arrested for fraud, not for violating sanctions. Incidentally the fraud in question comes under what I listed as a). It involved money transferred through USA's HSBC offices and above all didn't centre around violating sanctions directly, but rather defrauding financial institutions by omitting information that would have caused them to violate sanctions.
I repeat what I said to the GP: This is far more complex than anyone realises.
Re: That's odd (Score:2)
I'm certain that international law is an extremely complicated field, but in the end the US will always get what they want, at least in the half of the world that they control.
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Indeed they did. Quite critically there are two things relevant to the case here, firstly a) in my list. They were charged with misappropriating equipment from companies based in the USA. Therefore USA sanctions apply. Secondly (and the reason for why this went so quickly and smoothly) the EU has sanctions on Russia. An equivalent crime in two countries is normally subject to almost rubberstamp levels of approvals for extradition orders.
The EU does not currently have sanctions on China other than an arms em
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Any company is free to not obey the EU outside the EU, but that doesn't explain why RoHS is a thing in the US, or why everyone obeys it even for non-EU destined goods.
Or why everyone gets those cookies popups even if they're not EU residents accessing an EU site. As much as we like the GPDR to apply globally, it doesn't.
Now, the EU law is good,
Re: That's odd (Score:2)
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Excuse me? Since when does the US get to tell non-US companies what to do and not to do?
I think international law is quite clear on where sovereignty of a country ends: at its borders on land and at 12 nautical miles at sea; the US's rules don't mean anything in the Netherlands.
If you want a common set of rules between countries, that's what international treaties are for. I don't think my home country will sign away its sovereignty.
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For instance - the demand that Apple make connectors that bend the knee to the EU regulators has caused me to buy new cables right here in the USA to fit that mandate.
The EU charger mandate doesn't take effect until 2024.
Apple iPhones still ship with the lightning cable that Apple has been using for ten years.
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Why does your reality differ from mine?
Probably because you're being intentionally vague so that you can have an argument. A charger differs? Stop the fucking presses. At this point you've provided nothing meaningful to indicate that Apple has done anything as a result of any EU ruling. All you've done is wave your hands and spout random nonsense about something changing over the years and you buying a magical American cable that's allegedly not available in the EU.
In any case if you are not in the EU, the reason Apple changed anything for you i
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It was a strange decision to make the iPad USB C, and the iPhone Lightning, and the MacBook range USB C.
That's why you need a dongle to charge your Apple Pencil from your iPad. It would be a very good thing for Americans if Apple decided to just fit all iPhones with a USB C port, like they should have done years ago.
Re: That's odd (Score:1)
The EU tries to regulate how American companies behave in the EU.
Lol how did this line of bullshit get modded to +4?
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Yeah there's generally no problem regulating companies which break the law. Unfortunately ASML (unlike the cases you're probably complaining about) haven't and aren't breaking any law.
You seem to think the EU is just some arbitrary America hater, whereas in reality they are an equal opportunity punisher of rule breakers. Now why do you think American companies get caught so often in the crossfire? *ponders*.
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Why should the EU get involved in this effort to stop China developing high end IC manufacturing anyway?
It's doomed to failure, at best it will damage US companies and maybe delay China a year or two, or more likely make them redouble efforts to replace US technology.
The EU is concentrating on developing domestic IC manufacturing. That's the best way to compete, not trying to get your government to slow your competitors down because you failed to invest in R&D and new factories. It's also much more cons
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Why should the EU get involved in this effort to stop China developing high end IC manufacturing anyway?
It's doomed to failure, at best it will damage US companies and maybe delay China a year or two, or more likely make them redouble efforts to replace US technology.
The EU is concentrating on developing domestic IC manufacturing. That's the best way to compete, not trying to get your government to slow your competitors down because you failed to invest in R&D and new factories. It's also much more consumer friendly.
We'll see. I think the EU is more oriented towards ordering creators around than actually creating anything.
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We'll see. I think the EU is more oriented towards ordering creators around than actually creating anything.
Let us know when you need your SCUBA tank changed. You're clearly in very deep.
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Yeah there's generally no problem regulating companies which break the law. Unfortunately ASML (unlike the cases you're probably complaining about) haven't and aren't breaking any law.
You seem to think the EU is just some arbitrary America hater, whereas in reality they are an equal opportunity punisher of rule breakers. Now why do you think American companies get caught so often in the crossfire? *ponders*.
Actually, I don't think the EU as such hates the USA. Some of their citizens do.
What I do think is that the EU and constituent countries believe is that they have some sort of right to dictate terms on things that are at best, pretty petty.
They and their citizens really gain nothing by deciding that Apple products must change their connectors. If I but an Apple product, I'll use the charger that came with it. If I buy an android device, the same thing applies.
Where I think actual hate applies, it is
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What I do think is that the EU and constituent countries believe is that they have some sort of right to dictate terms on things that are at best, pretty petty.
Of course they do. Every country does within their own borders.
They and their citizens really gain nothing by deciding that Apple products must change their connectors.
This has been discussed to death. Citizens have nothing to do with it. You have chosen to remain wilfully ignorant the last god knows how many times this proposal has been discussed. So go wallow away in your dumbness.
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If I think the Founding Fathers and President Ronald Reagan would have approved, then it's a Conservative value. That's how cults work don't you know?
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Democrats must house everybody who is not a fascist. HUGE tent... which includes the light fringe corporatists.
Sadly, slow people have fallen into the tactics to destroy words like fascist, communist, and ANTIFA (the good guys in WW2) in a realistic version of 1984's newspeak. They sure quickly made the idea and non-organization "ANTIFA" into a scary cult... it's like the early days of the 3rd Reich where they vilified communists most because they were a real threat; difference being their main opposition
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A lot of my Progressive friends (and a few self-proclaimed socialists) decry the Democratic Party for not holding up progressive values or performance policy actions that could be seen as liberal (by them). But I can't seem to find a timeline where Democrats where historically as left wing as either extreme seems to say. It's mostly been razor thin bologna slices away from the center in either direction.
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I wish we had real communists and a party like they used to have; simply because they'd loose but in their showing people would see what the REAL thing actually is instead of calling somebody a fascist communist. I've seen a handful of times and in person a couple times that label used seriously; that is, unironically!
I get confused with many groups by people using one or two binary filters... this happens more today than decades ago. Fanatics seem about the same today but I think the number of people bec
ASML have employees all over the world (Score:3)
Interesting I had a look at ASML's website and they have some numbers for employees in various countries ...
Netherlands 15K
US 5K
Taiwan 3.6K
South Korea 1.4K
Germany 1.2K
China 1K
Japan 0.25K
Total worldwide 32K
It is likely that in at least some of these countries components are made than are not made anywhere else. For example with regard to their facilities in Berlin Germany ASML state 'Several key components for our lithography systems are developed and produced here'.
If ASML produce/buy any of these components in/from the US then the US can prevent ASML from selling machines to China without the cooperation of other governments or ASML. However since 2019 the Dutch government has not granted export licenses to ASML for exporting EUV machine to China(probably due to pressure from the US government https://www.electronicdesign.c... [electronicdesign.com]) but they do still allow export of DUV machines.
As this has been going on for a few years now it is possible that ASML have made backup plans but it would be very expensive to setup duplicate manufacturing facilities for some of these components(some of which ASML may not make themselves).
It is also possible that some of these components are made in China in which case
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ASML is generally one of those 'silent' companies. They're incredibly important, but no one's ever heard of them, or knows what they do.
That is until this sort of thing happens, and people go "What? Wow!"
Re: ASML have employees all over the world (Score:2)
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Or the fact that practically all isotopes being used in medical applications are made by 2 nuclear reactors, of which one is currently down...
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Their US offices are nearby (Score:2)
Restricting DUV machines to China may be a mistake (Score:2)
Restricting the sale of DUV machines to China feels like a mistake to me anyway. China already has enough of the machines (and does so much microelectronics trade that the prospect of a ban on selling chips to them is very unlikely) that there is no hope of hobbling their ability to produce chips for military use. Their military isn't going to be hobbled the way restrictions on chip sales to Russia has hugely limited their ability to produce effective weapons.
Ok, so why would we want to stop the Chinese f