Tech war: Dutch trade restrictions on certain advanced chip-making equipment leaves China focused on legacy semiconductor production
- The Dutch government plans to restrict exports of certain advanced chip-making equipment to China over security concerns
- Semiconductor gear supplier ASML said its new line of deep ultraviolet lithography machines launched last year could be covered by the restriction
In spite of that development, China’s IC production using legacy process nodes is not affected, according to a Shanghai-based semiconductor industry investor who declined to be named. He described “China’s major bottleneck” as chip-making equipment and materials for advanced nodes.
ASML’s latest DUV system can enable sub-3-nanometre chip-making processes with significantly improved overlay performance, enabling productivity of up 295 wafers per hour, according to the company’s annual report published in February.
The company did not immediately respond to a request for comment on Thursday.
Schreinemacher has reportedly said the Dutch government’s trade restrictions will be introduced before the summer.
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The latest restriction is not expected to prevent China from buying legacy semiconductor manufacturing technology from ASML and other major chip-making gear suppliers, according to an executive at a major Beijing-based chip equipment maker who also declined to be identified. He said it would be too extreme to ban China from buying equipment for decades-old chip-making process nodes.
Those US restrictions were intended to cap China’s advanced logic chip-making capabilities at 14-nm, DRAM chips at 18-nm and 3D NAND chips at 128 layers.
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The potential worst-case scenario for China could be if the Dutch government bans exports of less-advanced DUV lithography machines. All ultraviolet lithography equipment uses laser technology to basically carve a pre-designed circuit onto a wafer.
ASML, the world’s dominant supplier of lithography systems to chip makers, has been barred from selling its most advanced extreme ultraviolet (EUV) lithography machines to China since 2019.
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That has inadvertently made ASML, which had mainland China as its third-largest market last year, a key chess piece for the US to halt Beijing’s advanced chip ambitions.
Sales of ArF Immersion DUV machines accounted for 34 per cent of ASML’s total system revenue of 15.4 billion euros (US$16.23 billion) in 2022, compared with a 36 per cent share in 2021. The company’s EUV sales, meanwhile, accounted for 46 per cent of total system sales in both 2021 and 2022, according to its December quarter financial results.