Chinese chip makers can import critical ASML tools until 2024, as new Netherlands rules restrict access to DUV systems

Chinese chip foundries have four more months to import advanced chip-making tools from Dutch firm ASML after the maker of the world’s most advanced lithography systems obtained approval from The Hague to continue shipping equipment to China through 2023.

AMSL, Europe’s largest technology firm by valuation, said that starting January 1, it would no longer be able to ship the Twinscan NXT:2000i, its most advanced immersion deep ultraviolet (DUV) lithography system, to China.

“Under the new export control rules, we are able to ship these systems until the end of the year,” ASML said in a statement on Friday, downplaying the potential impact on annual sales this year after beating estimates in the first half.

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On September 1, new rules in the Netherlands went into effect requiring a licence to export certain DUV systems to China. The country had previously restricted China-bound exports of even more advanced extreme ultraviolet (EUV) systems, hindering efforts from China’s top foundry Semiconductor Manufacturing International Corp (SMIC) in developing processes at the 10-nm level and more advanced.

The rules cover systems capable of making chips at the 5-nanometre process or more advanced, meaning ASML’s latest Twinscan system and subsequent models are covered by the restrictions.

The Netherlands and Japan have joined US efforts to control certain China-bound exports of chip-making tools, dealing a heavy blow to China’s semiconductor industry on top of US sanctions. ASML has a near-monopoly on advanced lithography systems that enable cutting-edge chip-making processes at leading foundries such as Taiwan Semiconductor Manufacturing Co (TSMC), Samsung Electronics and Intel.

Despite China’s accelerated drive to use more locally produced tools and key components, semiconductor equipment procured in-country accounts for just 15 per cent of the total at Chinese foundries, a top executive said at an industry conference this month. The other 85 per cent of machines come from the US, Netherlands and Japan.

ASML launched the 2100i DUV system, the latest in its 2000 series, in the third quarter last year, enabling sub-3-nm chip-making processes with significantly improved overlay performance and the ability to produce 295 wafers per hour, according to the company’s annual report published in February.

ASML has been barred from selling EUV lithography machines to China since 2019, but it had been able to still sell DUV systems to the country until this year, amid escalating pressure from the US.

South China Morning Post