China takes the coup de grace: Netherlands follows in the footsteps of the US to devastate its chip industry

The Netherlands plays a central role in the semiconductor industry. The biggest chip makers are American, like Intel or GlobalFoundries; Taiwanese, such as TSMC or UMC; South Koreans, like Samsung; or Chinese, like SMIC or Hua Hong Semiconductor. However, the most advanced lithography equipment used by these companies have been designed and manufactured in the Netherlands by ASML.

The leadership position held by the latter company in the semiconductor industry is sustained by its ability to develop the only extreme ultraviolet (EVU) photolithography machines available on the world market. In fact, Nikon and Canon withdrew from this race due to the enormous economic and R&D effort that the development of this equipment required.

The US-led Western alliance has always been reluctant to sell China its most advanced technologies, but last October 7, 2022 the Joe Biden Administration he clenched his fist to the fullest by including the entire Chinese semiconductor industry on the list reflecting the scope of its sanctions. However, the real strength of the United States comes from its ability to influence its partners, and in the field of integrated circuits the Netherlands is a priority ally.

ASML has never sold its UVE lithography machines, which are the most advanced it has, to Chinese companies, but going forward it will further limit the equipment it will deliver to China. And it is that the Government of the Netherlands just approved new sanctions They seek to boycott Chinese companies by preventing them, among other things, from buying deep ultraviolet lithography (UVP) equipment, which is the second most sophisticated ASML machine. These restrictions will go into effect before next summer.

Objective: to curtail China’s military development by torpedoing its chips

In practice, preventing Chinese companies from accessing Western-made UVE and UVP lithographic equipment is a fatal sentence. The only country that could ease these sanctions and help China preserve the health of its semiconductor industry is Japan, but it won’t because it revolves around the United States in the same orbit as the Netherlands. In fact, it is likely that the Japanese government Do not delay in joining this movement significantly limiting the equipment of Tokyo Electron and other Japanese companies that can reach China.

The statement issued by the Government of the Netherlands defends that its sanctions seek to protect national security. It is the same argument that the United States has been using for many months, so it is clear that what the West wants to torpedo is the possibility that China is capable of supplying its own highly integrated chips to its military industry. However, all is not lost for this Asian country, which will have a hard time becoming completely independent from the United States and its circle of influence in the field of chip manufacturing.

At this juncture, China has had no choice but to apply itself fully with the purpose of strengthening its semiconductor industry so that it is capable of accepting the sanctions that come from the West. And it is doing it. In fact, this strategy it is already beginning to bear fruit. In mid-August, the Chinese company Biren Technology announced that it has ready its BR104 GPU, which has an FP32 computing capacity of no less than 128 TFLOPS.

And at the end of last December, the microprocessor designer Loongson completed the fine-tuning of its 3D5000 CPU, a 32-core chip that is capable of working at a maximum clock frequency of 2.20 GHz. processors of this brand is the Chinese company SMIC, so it remains to be seen to what extent the new sanctions from the United States and the Netherlands penalize the activity of both this company and Hua Hong Semiconductor, which are the largest Chinese chip manufacturers . Far from appeasing, it is evident that the tension between China and the West is increasing.

Cover image: ASML

rmation: Reuters