Dutch Prime Minister Mark Rutte spoke with US President Joe Biden. The US has pressured the Netherlands to dam exports to China of high-tech semiconductor gear. The Netherlands is residence to ASML, one of many main firms within the international semiconductor provide chain.
Susan Walsh | AFP | Getty Photos
Washington has its eyes on the Netherlands, a small however essential European nation that would maintain the important thing to China’s future in high-end semiconductor manufacturing.
The Netherlands has a inhabitants of simply over 17 million individuals, however it’s additionally residence ASML, a star of the worldwide semiconductor provide chain. It produces a high-tech chip-making machine that China desires entry to.
The US seems to have satisfied the Netherlands to dam shipments to China for now, however relations seem strained because the Dutch weigh their financial prospects if they’re reduce off from the world’s second-largest financial system.
The crucial position of the ASML chip
ASML, based mostly within the city of Veldhoven, doesn’t produce chips. As a substitute, it makes and sells $200 million price of maximum ultraviolet (EUV) lithography machines to semiconductor makers like Taiwan’s TSMC.
These machines are wanted to provide essentially the most superior chips on the planet, and ASML has a de facto monopoly on them as a result of it’s the solely firm on the planet that makes them.
This makes ASML one of many main chip firms on the planet.
US stress on the Netherlands seems to have began in 2018 underneath the administration of former President Donald Trump. Based on a 2020 Reuters report, the Dutch authorities withdrew ASML’s license to export its EUV machines to China after in depth lobbying by the US authorities.
Below Trump, the US has begun a commerce warfare with China that has became a battle for technological supremacy, with Washington making an attempt to chop off the provision of crucial expertise to Chinese language firms.
Huawei, China’s telecommunications powerhouse, has confronted export restrictions which have disadvantaged it of the chips it must make smartphones and different merchandise, crippling its cell enterprise. Trump additionally used an export blacklist to take out China’s largest chipmaker. minimal wagefrom the US expertise sector.
President Joe Biden’s administration has taken the assault on China’s chip business one step additional.
In October, the US Commerce Division’s Bureau of Business and Safety launched basic guidelines requiring firms to use for a license in the event that they need to promote sure superior computing semiconductors or associated manufacturing gear in China.
ASML informed its American workers to cease serving Chinese language clients after the foundations have been launched.
Stress continues on the Netherlands to adjust to US guidelines. Alan Estevez, undersecretary of commerce for business and safety on the US Commerce Division, and Tarun Chhabra, senior director for expertise and homeland safety on the US Nationwide Safety Council, spoke with Dutch officers this month.
“Now that the US authorities has imposed unilateral end-use controls on US firms, these controls can be futile from their perspective if China might get these machines from ASML or Tokyo Electron (Japan),” Pranay Kotasthane, president of high- tech. geopolitics program on the Takshashila Establishment, informed CNBC.
“That is why the US authorities wish to flip these unilateral controls into multilateral controls, bringing nations just like the Netherlands, South Korea and Japan on board.”
The Nationwide Safety Council declined to remark when contacted by CNBC, whereas the Commerce Division didn’t reply to a request for remark.
A spokesman for the Netherlands’ Ministry of Overseas Affairs mentioned it didn’t touch upon official visits. The ministry didn’t reply to extra questions from CNBC.
Final week, US Secretary of State Antony Blinken welcomed “rising convergence in addressing the challenges that China poses”, notably with the European Union.
However the image within the Netherlands doesn’t look so rosy.
“Clearly we weigh our personal pursuits, our nationwide safety curiosity is of the utmost significance, clearly we’ve financial pursuits, as you may perceive and the geopolitical issue all the time performs a job,” mentioned Liesje Schreinemacher, Minister of Overseas Commerce and Cooperation for improvement. Holland mentioned final week.
She added that Beijing is “an essential buying and selling associate”.
— CNBC’s Silvia Amaro contributed to this report