In response to US demands, the Dutch government earlier this year banned ASML, a significant provider of lithography equipment to multinational chip manufacturers, from exporting sophisticated “DUV” tool lines to China.
As new Dutch rules on chip shipments to China threaten to strain bilateral ties, Chinese President Xi Jinping has cautioned that building technology barriers and cutting industrial supply networks would only lead to confrontation.
At a meeting in Beijing on Wednesday, Chinese official media reported that Xi informed Dutch Prime Minister Mark Rutte that cooperation was the only viable course of action, as “decoupling and breaking links” would lead to nothing.
In response to demands from the United States, the Dutch government started to withhold licenses earlier this year for ASML, the largest global provider of lithography equipment to computer chip manufacturers, to export sophisticated “DUV” tool lines to China.
The Netherlands is under pressure to defend its own economic interests, which include ASML, at the same time. China is the second-largest market for the nation’s largest enterprise, behind Taiwan.
“Artificially creating technological barriers and cutting off industrial and supply chains will only lead to division and confrontation,” Xi said to Rutte.
“The Chinese people also have the legitimate right to development, and no force can stop China’s scientific and technological development and progress.”
“Chip war”
The main topic of Rutte’s talks in Beijing was anticipated to be whether ASML would be granted licenses by the Dutch government to keep the advanced equipment that it has already sold to Chinese customers for billions of euros. These licenses are currently subject to export restrictions and many of them expire on December 31.
The financial performance of ASML, which controls the global market for lithography systems—instruments essential to the fabrication of computer chips—has been minimally impacted by the export restrictions thus far.
But in the long run, Chinese chipmakers might try to swap out its equipment for rival brands like Nikon and Canon if they perceive the Netherlands as an untrustworthy economic partner.
As part of Rutte’s team, Dutch Trade Minister Geoffrey van Leeuwen told the business newspaper FD on Tuesday that protecting ASML’s interests was his “number one” priority. Leeuwen was also in Beijing.
The political tightrope that the Dutch government must walk is reflected in his comments, since ASML is now at the center of the US-China “chip war”.
According to state media, Xi told Rutte that China was eager to increase the import of “high-quality” commodities from the Netherlands, although he did not elaborate.
In a broader sense, Xi stated that China was prepared to carry on creating an honest and practical working relationship with the Netherlands.
SOURCE: TRTWORLD
