How ASML’s big bet on China turned into headaches over data thefts as it got caught up in US-China tech war
- ASML data thefts in China are creating problems for the top producer of lithography chip-making equipment as it seeks to justify selling into the market
- China has grown into ASML’s third-biggest market, but the Netherlands might face greater pressure by Washington to do more to curb access to its tech
In the 10 years that Peter Wennink has run ASML Holding NV, China has gone from a rounding error to the chip-technology company’s third-biggest market. After new revelations about data theft linked to the country, questions are now mounting over the risks associated with that growth.
ASML’s chief executive officer has been steadfast in defending the company’s business there. Even after ASML’s own lawyers argued in court that ex-employees stole intellectual property as part of “a plot to get technology for the Chinese government”, the Dutch company publicly downplayed the issue. It suggested it wasn’t a victim of espionage but of rogue Silicon Valley staffers “who had broken the law to enrich themselves”.
“Wennink is not happy,” said Alexander Peterc, an analyst with Societe Generale. “All he wants is more customers buying their kit, especially if he’s invested into sales and distribution capability in a country such as China.”
At stake is the potential for Beijing to siphon off key technology for systems that can make the world’s most-advanced chips. No other company has mastered the technology of burning the complex patterns that give chips their function onto disks of silicon the way ASML has.
The company is so crucial for the chip industry that it controlled more than 90 per cent of the US$17.1 billion global market for lithography equipment as of 2021, according to research firm Gartner Inc. Its near monopoly on the most advanced lithography systems makes it a critical cog in the industry and a target for spying.
“ASML’s main issue lies with the cutting-edge technologies. That technological edge needs to be protected,” said David Criekemans, professor of international relations at the University of Antwerp. “China is a lucrative market. If you’re not there, then perhaps another entity could rival you.”