Yesterday it became known that by the summer of this year the Dutch authorities will decide on new export restrictions on the supply of lithographic equipment, which could affect the interests of Chinese customers. Third-party experts estimate that the revenue loss of ASML, the largest vendor, from the new restrictions will not exceed 10%, but the company itself considers its losses insignificant for the time being.
Keep in mind that since 2019 ASML is no longer able to supply China with advanced equipment for working with the so-called EUV lithography, and the new restrictions will affect some of the more mature DUV generation lithographic scanners, and in some In such cases, affected companies will be able to obtain the necessary export licenses. In this sense, the South Korean companies Samsung Electronics and SK hynix are certainly “lucky”, which have large factories for the production of memory chips in China and therefore have to modernize and expand them.
The main parameters of the new restrictions have not yet been established, as explained by Reuters, and in particular the same ASML does not know if it will continue to be able to service the equipment already sold to Chinese customers. Last year, the company got up to a quarter of its total revenue from service contracts, and equipment sales to China accounted for 14% of its total revenue. In total, it has supplied Chinese customers with equipment worth EUR 8 billion over the past ten years. So far, ASML still expects it to gain about €2.2 billion towards China this year, the same as last year, although the company’s overall sales in the global market could grow by 25%. ASML officials believe the new restrictions will affect the ability to ship only a small portion of the equipment shipped to Chinese customers.
Dutch Foreign Trade Minister Liesje Schreinemacher told a press conference on Thursday that the details of the new restrictions have yet to be determined. The country’s authorities will issue export licenses on a case-by-case basis and will not rely on US recommendations. ING estimates that the new restrictions will reduce ASML’s revenue from strength by 10%. According to experts, Chinese manufacturers will be forced to focus on mature lithography to increase their capacities even under constraints. ASML will eventually make up for the loss of the Chinese market in other directions.
Ms. Schreinemacher also understands reacted on the Chinese Foreign Ministry’s reaction to the Netherlands’ decision to tighten export restrictions. Chinese officials said yesterday that the new export control rules “restrict normal economic and commodity exchanges between Chinese and Dutch companies”. Minister Schreinemacher said she understands China’s concerns but hopes to maintain good diplomatic relations between the countries. China, she said, remains the largest foreign trade partner for both the Netherlands and Europe. “I hope that this interdependence will work to our mutual benefit,” – commented on relations between China and the Netherlands, the trade minister of the latter country. She also made it clear that no parallel should be drawn between the restrictions imposed by the US in early October and the current initiative by the Netherlands. According to Schreinemacher, the authorities in the latter countries act according to their own assessments.