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The US plan to prevent China from being crowned king of the semiconductor industry goes through the Netherlands

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After the “chip shortage” that has wreaked all kinds of havoc, china aspires to become the world leader in the semiconductor industry, but The United States is willing to use its power and influence to stop it.. Washington’s plan is to deal a cheap blow to the Asians by preventing ASML, the world’s largest manufacturer of photolithographic equipment, from selling some of its products.

According to Bloomberg, the United States is trying to persuade the Netherlands, which is where this company responsible for designing and manufacturing is located. photolithographic equipment used by most semiconductor manufacturers in their facilities, to expand existing restrictions on the sale of advanced systems to China, which would entail expanding the number of prohibited products.

If Washington achieves its objective, it could damage the “Made in China 2025” plan, announced in 2015, with which the Asian giant intends to “stop being the world’s factory” to become a producer of services and products of greater value. Precisely, one of the pillars of this plan is to achieve greater prominence in the semiconductor industry, but it has an Achilles’ heel, the dependence on external partners.

ASML is a key global player

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But how could limiting one company’s sales impact the goals of an entire nation? To understand it, we must understand how important the semiconductor industry is for China and the leading role that ASML occupies globally.

China, which has increased its chip production by more than 40%, is now home to manufacturers such as Semiconductor Manufacturing International, which is preparing a $2.35 billion factory, and Hua Hong Semiconductor. yesus chips are used in a wide variety of productsranging from cars to smartphones and televisions.

Now, of all the processes involved in chip manufacturing, photolithography is as important as it is essential. As defined by the expert in this area, Ignacio Mártil, this accounts for 50% of the production time of an integrated circuit and 30% of its cost. And to achieve this, high-tech equipment is needed that is manufactured by a few companies in the world, and one of them is ASML.

ASML is not the only manufacturer of this equipment, but it controls more than 67% of this market. The competition is made up of other players such as Ultratech, Canon and Nikon, but in a scenario where the Netherlands decides to extend the restrictions against China, these other companies are unlikely to be able to take their place anytime soon. The reason? The world panorama of the industry itself.

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Earlier this year, ASML acknowledged that supply chain issues were preventing them from meeting demand for equipment. Although they expected to ship more photolithographic systems than in 2021, the market demanded a 50% increase in production capacity, something that would take them about two years to achieve.

Finally, it should be noted that leaving China without access to the necessary equipment to manufacture chips may be a victory for some US politicians, but it could come with a bitter taste. The production of a huge number of technological products is concentrated within the borders of the Asian country, including DRAM and 3D NAND memories, which is why the hit could cause a shock wave in the global supply chain.

Pictures | ASML

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