China has expressed its discontent over the Dutch government’s decision to tighten export controls on ASML chipmaking equipment, further escalating tensions amidst a global semiconductor landscape already fraught with geopolitical complexities. The Chinese commerce ministry voiced its opposition, labelling the move as an attempt by the United States to maintain its global dominance by coercing allies into restricting China’s access to critical semiconductor technologies, reports Reuters.
The newly imposed controls target ASML’s 1970i and 1980i DUV (Deep Ultraviolet) immersion lithography systems, aligning Dutch regulations with the export restrictions unilaterally implemented by the U.S. last year. Beijing has consistently criticized Washington’s strategy of leveraging its influence over allies to curb China’s progress in the semiconductor sector. In response to the Dutch announcement, China’s commerce ministry declared its “resolute opposition” to such measures and urged the Dutch side to refrain from actions that could harm Sino-Dutch cooperation in semiconductors.
The Dutch trade minister defended the decision as a matter of national security, underlining the growing concerns surrounding the potential military applications of advanced semiconductor technologies. This latest move underscores the increasing challenges faced by China as it strives to achieve self-sufficiency in chip manufacturing amid mounting international pressure.
Meanwhile, the global semiconductor equipment market continues to demonstrate resilience. According to SEMI, worldwide semiconductor equipment billings saw a year-on-year increase of 4% in the second quarter of 2024, reaching $26.8 billion. The first half of 2024 witnessed total billings of $53.2 billion, indicating a healthy year for the industry overall. SEMI President and CEO Ajit Manocha attributed this growth to strategic investments aimed at meeting the sustained demand for advanced technologies and bolstering chipmaking ecosystems in various regions.
Moreover, China has become the biggest player. According to SEMI, China’s spending on semiconductor manufacturing equipment reached a staggering $25 billion in the first half of 2024, surpassing the combined expenditures of South Korea, Taiwan, and the United States. It is projected to reach a record $50 billion by the end of the year.
The country has become the largest revenue source for top global chip equipment suppliers, with companies like Applied Materials, Lam Research, and KLA reporting that China accounts for a significant portion of their revenue. However, SEMI also cautions that China’s overall investment in new chip plants is expected to “normalise” in the coming years.
The contrasting dynamics of escalating geopolitical tensions and robust industry growth highlight the complex interplay of forces shaping the global semiconductor landscape. As the industry navigates this challenging environment, it remains to be seen how the balance between national security concerns and economic imperatives will be struck in the years to come.
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