With Foreign Minister Wopke Hoekstra’s visit to China, it has become clear that the Netherlands is embroiled in a chip war between the US and China. ‘It’s time for us to show our colours.’
Earlier this year, the Netherlands agreed to an export restriction of chip machines from ASML to China. Greetings from the United States, which Japan has also joined. A delicate topic, as emerged today during the conversation between Hoekstra and his counterpart. China has emphasized their concerns, and Hoekstra has done so. But it hasn’t become very concrete,’ says China correspondent Anouk Eigenraam.
The best of the best
ASML’s chip machine export ban only applies to the latest high-tech EUV machines. “This is the crème de la crème, the size of a truck that costs around 125 million euros each,” says Pieter Couwenberg, journalist at FD. This means that the older generation machine can still be exported to China. There is currently no ban on this.
‘ASML is currently on a mountain of gold’
But according to Paul Verhagen, a high-tech expert at the Center for Strategic Studies in The Hague, China above all wants to know how far the export ban goes in practice. ‘They just want those machines from ASML. And if that’s not possible, they want to know where I stand.’ Where the US has indicated that chip machines cannot be used for military applications, it is unclear how concrete that ban is.
Military purposes
This makes the conversation difficult for Minister Hoekstra, Couwenberg thinks. “The Americans are in charge.” And he also clashes with the policy of ASML. «They have always said: we supply cars to those who want them. You can only make chips with it, but they can be used for scanners, for cars, but also for military purposes.’
In this regard, the Netherlands is involved in a chips dispute between the United States and China. A difficult position, with advantages, thinks Couwenberg. ‘ASML is currently on a mountain of gold. They are the only ones with this technology, which makes them a monopolist when it comes to building chip machines.’ China, the United States and Europe will invest billions in the chip industry in the coming years. And ASML is the only one able to supply the machines for this, Couwenberg points out. ‘The order book is swollen, they won’t be bothered by this for the next ten years.’
Verhagen also believes that the problems for ASML have not yet arisen. ‘For now, there are only restrictions on those EUV machines, not DUV machines. But the United States wants it, the question is when.’ That is why it is in the interest of the Netherlands to extend the ban on DUV machines for as long as possible, thinks Verhagen. But at some point he stops. China is a very large economy and accounts for a large part of ASML’s income.’
According to Couwenberg, this blow may be cushioned by growing demand from other countries. “India wants its own chip factory, Europe is investing billions, Taiwan remains important and Intel is building a mega factory in the desert of the US state of Nevada.”
Are we going with the Americans or the Chinese? ‘
Arms race
Earlier this week, China agreed to impose an export ban on US-based Micron chips. This strained relations between the two countries. This ban will not affect the Netherlands any time soon. “China would like to discuss with America, but prefers to keep Europe on board.” An escalation of the conflict between the United States and China is much more likely. According to Verhagen, this will lead to an “arms race that will last for decades”. “In the field of artificial intelligence, quantum computers and all kinds of new technologies that have a clear civilian and military application.”
And that puts Europe, the Netherlands, in a quandary, thinks Verhagen. ‘We’ll have to show the color. Are we going with the Americans or the Chinese? You choose the Americans militarily, but you can choose China economically. Both sides have advantages and disadvantages.’
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
