Chinese imports of ASML lithography chip-making machines have surged past the Dutch company’s 2023 estimates

ASML has a near monopoly on the world’s most advanced lithography machines, which are required for the production of cutting-edge chips. Under US pressure, the company has cut off exports of its extreme ultraviolet (EUV) lithography systems to China.

The company has until now been able to continue shipments of less advanced deep ultraviolet (DUV) lithography systems to the country, but that is expected to soon change.

Under new rules from the Netherlands that go into effect September 1, ASML will be required to apply for a licence from The Hague to ship its most advanced DUV lithography systems, dealing a fresh blow to China’s semiconductor industry.

As a result, Chinese firms have rushed to stockpile machines so they can continue to fulfil production demands for as long as possible after next month, JW Insights said.

From 2015 to 2022, the eastern province of Jiangsu and the cities of Shanghai and Beijing were China’s biggest importers of Dutch lithography machines, the report noted.

Heavy demand from China helped offset a slump in the global semiconductor industry and boosted ASML’s earnings this year, the company said last month.

While the firm saw a delay in demand for its DUV equipment from some customers, it has been compensated by strong demand for tools used in more mature and mid-critical nodes, particularly in China, ASML CEO Peter Wennink said in an earnings call [when?].

“Our Chinese customers say: ‘We are happy to take the machines that others don’t want’, because their fabs are ready and they can take the tools that become available,” Wennink said in a separate video interview released by the company.