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Dutch May Give in to US Push Against Servicing China Chip Tools

From China’s strategic alliance with Russia to chip equipment giant ASML’s plans to move operations abroad — the Mark Rutte government will have a lot to consider as it makes a decision

ASML assembly engineers work on a Twinscan DUV lithography system at their base in Veldhoven
ASML assembly engineers work on a Twinscan DUV lithography system at their base in Veldhoven. Photo: Reuters


National security interests and geopolitical concerns may push the Netherlands government to curb chip tools-maker ASML’s ability to service some equipment it has previously sold to China.

Prime Minister Mark Rutte has so far been reluctant to make a blanket decision on the issue which poses a diplomatic and business headache for his government.

However his administration’s public statements and national security interests suggest it will be slow to approve Chinese maintenance requests in future and quick to deny them.


Also on AF: US Wants ASML to ‘Cut Servicing to Some Chinese Chipmakers’


Concerns around ASML servicing chipmaking equipment it has previously sold to China has been centerstage in the ongoing US-China tech war over the past several months.

Washington has reportedly been pressuring the Dutch government to curb ASML’s servicing licenses at least since last year.

US President Joe Biden’s export policy chief Alan Estevez is also expected to raise the servicing contracts at a meeting on Monday with Dutch government officials and executives from ASML.

If the Rutte government decides to align with Washington on export restrictions, it would be a serious setback for China’s attempts to build up its domestic chip industry. ASML’s gear is almost impossible to replace and will break down over time if not maintained.


Concerns around Russia in focus

One emerging factor likely to impact the Dutch decision is the Rutte Administration’s security priorities, particularly support for Ukraine in its war against Russia.

The Netherlands holds Russia responsible for the 2014 downing of Malaysia Flight 17 (MH17) over eastern Ukraine, which killed 198 Dutch citizens. It also houses and supports the Hague-based International Criminal Court which has issued a warrant for Putin’s arrest on war crimes charges.

Rutte is also favoured to become the next NATO secretary general.

The Dutch PM has previously called on China to do more to keep Russia from obtaining “dual-use goods” with both civilian and military applications – such as ASML’s machines and the chips they are used to make.

While his comments do not translate to a policy of presumptive denial for Chinese customers seeking ASML gear that falls under licensing rules, as US policy does, they do indicate the Dutch government’s likely starting point.


‘Case by case’ decisions

As part of his talks with China, Rutte travelled to Beijing last week and met with Chinese President Xi Jinping.

He said afterwards that China’s support for Russia was a serious problem at a time when the Netherlands is arming Ukraine with F-16s.

“It is incredibly important that China understand any victory for Russia (in Ukraine) would pose an immediate threat” to both the Netherlands and Europe, Rutte said.

He declined to answer directly whether his government will deny licences for ASML’s Chinese customers.

Meanwhile, China’s Xi told state-backed media he had warned Rutte against “decoupling and breaking links” with China.

Xi has a strategic, ‘no limits’ alliance with Russian President Vladimir Putin, even as Beijing says it is neutral on the Ukraine conflict.



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“If the US role in NATO decreases, then probably also the leverage that the US has… with regard to technology transfers to China will decrease,” said Frans-Paul van der Putten of the Clingendael Institute, a Dutch think tank.

He said the Dutch see China as “the only country that has at least some kind of influence on Russia potentially”.

Ultimately, the Dutch government will need to weigh its response given fears of weakening US support for its security priorities, including Ukraine, especially if Donald Trump wins November’s presidential election.

The Dutch Foreign Ministry, which oversees exports, said on Thursday it will judge Chinese licensing requests the same way it does others: on a “case by case” basis, weighing the risks they might end up having undesired military uses.

But that will be difficult for Dutch officials to determine from afar, especially given Xi’s civil-military fusion policies.


Rock and a hard place

European Parliament lawmaker Bart Groothuis said the Netherlands should determine export policy in concert with larger allies.

“It is much better for us to do that, regulate ASML, together with the US, or in the future it may be Europe, and I would say that is the best way forward,” he said.

But curbing servicing licenses for ASML could also complicate efforts by Rutte’s government to stop the chip tools giant from moving operations abroad.

ASML is the Netherlands’ biggest company, and Europe’s most valuable firm. The damage to the firm from an uncertain number of licence denials will be gradual and limited.

Maintenance accounts for about 20% of ASML’s revenue and China is its third-biggest market after Taiwan and South Korea.

The firm has sold at least $11 billion of equipment to chipmakers in China over the past three years, much of which does not fall under any export restrictions. Some of that equipment has also gone to plants in China with Western-allied owners, such as SK Hynix and TSMC.



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China innovation potential

Individual Chinese chipmakers or plants that are denied a licence could be badly hurt, as ASML machines are essential for making chips and hard to replace.

Experts say, however, that Chinese chipmakers have shown surprising resilience to US-led sanctions so far and will continue to find ways to engineer around them in the future.

In its annual report for 2023, ASML warned of a possible hit from further expansion of export curbs, adding that effort by its competitors to build self-sufficiency posed an added threat.

The company’s former CEO Peter Wennink has also previously warned against expanding curbs targeting China saying they would force the country’s 1.4 billion people to “become very innovative.”

Paul Triolo, a US expert on China and semiconductors said, “the cutting-off of servicing is going to inexorably degrade the capabilities of that equipment. And so the manufacturer will be fighting a sort of rearguard action to keep those machines going as long as possible.”

“The question is in the long term, what other workarounds are possible here?”


  • Reuters, with additional editing by Vishakha Saxena


Also read:

Curbs on ASML ‘to Stop Use of Advanced Chips by China Military’

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ASML Employee Who Stole Chip Secrets ‘Went to Work at Huawei’

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As Korea Mulls Joining US Chip War, China Says ‘Don’t Give In’

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Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]


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