At the beginning of the new year this year, the United States once again chose the old path of exerting pressure on China, demanding that the Dutch company ASML stop supplying China's first lithography machine. However, America's euphoria did not last long, and ASML's words caught the United States off guard. Recently, at the request of Biden**, the Netherlands** suddenly announced the revocation of the delivery license of the NXT:2050i and NXT:2100i lithography systems, including orders in production, which must also suspend deliveries. Previously, the Netherlands asked Sullivan, the assistant for U.S. affairs, to negotiate directly with ASML, but ASML apparently did not resist the pressure. This decision is a huge blow to China, China** said that the Dutch side's approach violates the fair position and market principles, undermines the spirit of the contract, and is not conducive to the development of Sino-Dutch relations, and will resolutely take all actions to protect its legitimate rights and interests. The United States, on the other hand, rejoiced when they saw that their goal had been achieved, but they did not expect that a word from ASML would shatter their dreams. ASML acknowledged as soon as it stopped supplying to China that the move would have an impact on Chinese customers. However, now, ASML has explained another detail, saying that Chinese customers have received a backlog of DUV orders. ASML means that even if it stops from now, it's too late. According to the data, China imported a total of 64 ASML lithography machines last year, which is equivalent to 64 production lines. Before the U.S. ban was issued, the Netherlands** used the time spent with the U.S. to export 16 units to China. Therefore, in the next three to five years, there will be no shortage of lithography machines in China.
ASML's shutdown has had some impact on China, but it's not terrible. China has begun to increase its efforts to independently develop lithography machines, and even seek cooperation with other leading companies. China's rapidly developing semiconductor industry has already made remarkable achievements. Especially in the field of chip equipment manufacturing, China's semiconductor foundry companies have achieved a breakthrough in 7nm technology, which has shocked the entire industry. At the same time, China is injecting huge amounts of money to support the development of the domestic semiconductor equipment industry. The third phase of the national semiconductor industry plan will reach 300 billion yuan. This makes China's semiconductor equipment sales revenue account for 29 percent of the global market share3%。ASML CEO Wennink also criticized the U.S. semiconductor policy towards China, saying that completely isolating China from China would not work, and such an approach could ultimately backfire and only promote faster innovation in China's semiconductor industry.
The decision to stop supplying lithography machines is both an opportunity and a challenge for China. On the one hand, China can increase the independent research and development of semiconductor technology to promote local enterprises to make greater breakthroughs in the field of lithography machines. China's semiconductor industry has made remarkable achievements, especially in the production of chip equipment, which shows that China has a certain technical strength and market demand. The suspension of the supply of lithography machines will force China to accelerate the pace of independent research and development and achieve independence in the field of lithography machines as soon as possible. On the other hand, the suspension of lithography machines has also brought certain challenges to China. Lithography machines are one of the most important equipment in the semiconductor manufacturing process, and for China, relying on imported lithography machines can lead to insufficient supply and technical constraints. Therefore, China needs to increase its independent research and development efforts in the short term, and actively seek cooperation with other leading companies to ensure the stability and quality of lithography machines.
The Netherlands** is faced with a dilemma: it does not want to offend either the United States or China. As a result, they have adopted a "guerrilla" approach, trying to reduce the impact on Chinese customers while continuing to engage with the United States. The Netherlands is the location of ASML, and the lithography machine is the country's pillar industry. In addition, China is ASML's third-largest market in the world, accounting for 16% of its total revenue. Cutting off ties with the Chinese market will only accelerate the pace of China's independent research and development of lithography machines, or turn to other leading companies to cooperate, and will also affect ASML's innovation capabilities. It can be seen that the choice dilemma of the Netherlands**. For China, the suspension of lithography machines will only force a "Chinese version of ASML". China's semiconductor industry is developing rapidly, especially in the field of chip equipment production. China has achieved co-processing of 7nm technology, accounting for a significant proportion of the global market share. China has injected huge amounts of money into the domestic semiconductor equipment industry and strengthened its dependence on domestic companies. Therefore, China not only has the ability to independently develop lithography machines, but also has the ability to attract cooperation from other leading companies. The sanctions imposed by the United States will only force China to accelerate the pace of innovation and make its domestic industries stronger.
In short, although the United States has taken measures to stop the supply of lithography machines, China will not be greatly affected by this. China has begun to pursue independent research and development in the semiconductor industry and strengthen cooperation with domestic top companies. ASML may be hit to some extent, but it will also force out China's "Chinese version of ASML". China's semiconductor industry is developing rapidly and has achieved a prominent position in the global market. The discontinuation of lithography machines will only accelerate the pace of China's independent research and development and promote China's greater innovation progress in the semiconductor industry. Not long ago, the United States chose to put pressure on China, demanding that the Dutch company ASML stop supplying lithography machines to China. However, this initiative did not last long. The Netherlands** recently announced the revocation of the shipping license for lithography machine systems, including orders that are in production, must also be suspended. This is a blow to China, but China has begun to increase its independent research and development of lithography machines and seek cooperation from other leading companies. China has made remarkable achievements in the semiconductor industry, especially in the production of chip equipment. China** is injecting huge funds to support the development of the domestic semiconductor equipment industry. ASML's CEO agrees that it will not work to completely isolate China, which will only provide an opportunity for China's innovation in the semiconductor industry. The decision to stop supplying lithography machines is both an opportunity and a challenge for China. China needs to accelerate the pace of independent research and development in the field of lithography machines, and at the same time seek cooperation with other leading companies to ensure the stability and quality of lithography machines. The Netherlands is faced with a dilemma, neither wanting to offend the United States nor China. China can cope with the impact of the supply of lithography machines by accelerating the pace of independent research and development and strengthening cooperation with other leading companies. In short, the U.S. sanctions will only force China to accelerate the pace of innovation in the semiconductor industry, which already has independent R&D capabilities and market demand, so it will not be affected too much.