US and Dutch officials are meeting in Washington DC on Friday to discuss new export restrictions on key Dutch microchip technology to China.
A deal is within reach, unnamed source Told Media ahead of the talks. But “discussions are ongoing” and “there’s really no idea on when there will be an outcome,” Sean Silbert, a senior adviser at the Dutch embassy in Washington DC, told POLITICO in an email.
An agreement to limit sales of advanced technology to China would be a major victory for Washington in its efforts to stem China’s rise as a tech superpower. It would specifically block the sale of advanced microchip printing equipment by Dutch Giants ASMLOne of the few companies in the world that manufactures the printers needed to manufacture high-end semiconductors.
But a deal is expected to shake up ties between The Hague and other EU capitals, as it would create a parallel export control regime between the US, the Netherlands and others that challenges the EU’s common posture towards China. .
The talks are taking place in a “technical meeting” and include Japan, which controls other significant parts of the chip equipment market. Discussions have been going on for several months and the U.S. imposed In October, its own export restrictions on advanced chip technology to China.
The news of the meeting was first reported by reuters on Thursday.
the netherlands is a key player in American strategy To stop microchip supply to China. Japan has indicated before that it is willing to play along with the US, but the Netherlands has taken a more cautious approach, knowing full well that a block of sales to China would hurt ASML’s order book and long-term strategy.
The US has spent months prodding the Netherlands on the need to take a stronger political line against China, according to three officials directly involved in those discussions. Washington has wooed The Hague by inviting it to host this year’s “Summit for Democracy,” an annual event initiated by the White House to promote democratic values around the world.
Dutch Prime Minister Mark Rutte met with US President Joe Biden last week, where they discussed “quite frankly, how to meet the challenges of China,” the US leader told reporters ahead of the meeting.
The export restrictions being considered would target some of ASML’s so-called deep ultraviolet (DUV) lithography machines. The sanctions will further tighten ASML sales to China after exports from 2019 of even more advanced extreme ultraviolet (EUV) machines failed to gain approval from Dutch authorities.
China represents 18 percent of ASML’s order book, its chief financial officer Roger Dassen said in an interview in the margins of the firm’s financial results this week. But a ban will not be felt immediately as the demand for its machines globally is yet to be manufactured by the company.
Part of the discussions between the US and Dutch delegations has been about the extent of defining when chip technology is advanced, and thus strategically important.
In industry, chips with single-digit nanometer are considered more advanced than chips with double-digit nanometer. EUV machines are best positioned to manufacture those single-digit chips, but in some cases DUV machines can be “enhanced” by combining them with other technology, which increases their strategic value in the tug of war over chip technology.
ASML chief executive Peter Weinnick told reporters this week he expected a deal “sooner than later” but that it would take “months” to clarify the details of a high-level agreement.
Mark Scott contributed reporting.