The chip rivalry between the US and China has become quite tight. The US has banned the Netherlands-based ASML from exporting to China. Since ASML plays a critical role in the production of chip machines, it has locked down production all over the world. Finally, the Dutch government stepped in.

Netherlands and ASML to negotiate with the US for Chinese exports

Dutch Prime Minister Mark Rutte said the government will protect ASML, which produces chip machines. In this context, he stated that they will be able to overcome the restrictions imposed by the US for exports to China. He stated that they have to protect the economic interests of the company and the country.

ASML is the world’s largest supplier of lithography systems used to map tiny circuits on semiconductors. Chinese companies represent about 20 percent of ASML’s order pipeline. This makes China an important market.

But exporting the most advanced equipment to China raises national security concerns. It is thought that the Chinese government could use this equipment for the country’s military technology. The US has therefore imposed restrictions on the export of some ASML tools to China because of such risks.

Prime Minister Rutte underlined that ASML is an extremely important and innovative company for the Netherlands. Accordingly, its global success should not suffer because of China. He said that the government is in talks with ASML to balance these issues.

Further tightening of restrictions for ASML could lead Chinese chipmakers to shift to alternative products. This would both increase chip prices and disrupt production. It is unclear whether the US will relax these restrictions.