Dutch semiconductor machine export restrictions to come into force in September

Dutch companies that produce machines that make advanced semiconductor processor chips will be required to have export licenses before they can sell them overseas starting in September, the government announced Friday.

The new measure, which was first announced in March, "is country neutral," the government said. But it is seen as part of a U.S. policy that aims at restricting China's access to materials used to make such chips, which can be used in military technology. The requirement will notably affect Duch company ASML, the world's only producer of machines that use extreme ultraviolet lithography to make advanced semiconductor chips. The Dutch government has prohibited the Veldhoven-based company from exporting some of its machines to China since 2019.

″We have taken this step in the interest of our national security. It is good that the companies concerned now know where they stand. This way they can adapt to the new regulations in time," Foreign Trade and Development Cooperation Minister Liesje Schreinemacher said in a statement.

Dutch Prime Minister Mark Rutte visited U.S. President Joe Biden in January for talks that included discussions about ASML's advanced chip machines.

The Biden administration in October imposed export controls to limit China's access to advanced chips, which it says can be used to make weapons, commit human rights abuses and improve the speed and accuracy of its military logistics. It urged allies like Japan and the Netherlands to follow suit.

In a statement on the website of its Dutch embassy, China slammed the new measures as "completely unreasonable and untenable."

It said such restrictions "will not only damage the legitimate rights of Chinese companies, but also cause losses to Dutch companies, destabilize the global industrial and supply chains and hurt the good reputation of the Netherlands in supporting free trade."

ASML, headquartered in the southern Dutch town of Veldhoven, has continued to ship lower-quality chip lithography systems to China despite the government's restrictions on advanced machines.

The company said in a statement that it will now have to apply for export licenses for all shipments of its most advanced deep ultraviolet lithography systems.

"The Dutch government will determine whether to grant or deny the required export licenses and provide further details to the company on any conditions that apply," ASML said. The company added that it does not expect the restrictions "to have a material impact on our financial outlook."

Schreinemacher said the restrictions were carefully considered and as precise as possible.

"This way we can address the most important vulnerabilities without unnecessarily disrupting the global production of chips," she said.

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