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China, despite its growing economic status and political influence, remains behind the likes of the USA, Taiwan, Japan, and Korea when it comes to its chip sector, and the US would like to keep it that way. According to Bloomberg (opens in new tab), The US is pushing Dutch chipmaking technology firm ASML to stop selling China essential tech that’s needed to grow its chipmaking sector.
ASML is the world’s largest supplier of lithography equipment, which is essential for chip production. ASML is already barred from selling its most advanced Extreme Ultraviolet (EUV) tools to China, but now the US wants to go further and block it from selling Deep Ultraviolet (DUV) tools as well.
These less advanced tools are still essential for the production of application-specific chips found in everyday devices, from household electronics, to cars, to our PCs. Most relevant to the current situation, these chips are vital for automation and robotics applications and manufacturing, which is critical for China. If ASML does go ahead with the ban, it won’t do much to ease ongoing chip shortage issues that still affect many types of chips.
The US government’s move is definitely an escalation in the ongoing trade war between the two powers. Despite the Biden administration’s moves to ease (opens in new tab) some of the Trump-era trade tariffs, it shows no signs of easing restrictions on advanced technology, even though ASML is a Dutch company.
Chinese Foreign Ministry spokesperson Zhao Lijian labelled the move an example of “technological terrorism.” Zhao went on to say, “The US continues to link technological and trade issues with politics and ideology and uses them as tools to push forward its technological blockade and decoupling in an attempt to block others’ path, but it will only isolate itself in the end.”
China and the US’s heated rhetoric and tit-for-tat trade disputes don’t look like they’ll be slowing down any time soon. Let’s hope that a tech cold war doesn’t lead to a real cold war: China does always have its eyes on Taiwan and its chipmaking prowess.
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