The top two suppliers of chip-making tools in the world, ASML Holdings, and Lam Research, are reportedly rushing to comply with the most recent US trade restrictions on China by removing American engineers from their operations in the country, as per a report by the SCMP.
(Photo : EMMANUEL DUNAND/AFP via Getty Images)
An employee walks past an ASML logo, a Dutch company which is currently the largest supplier in the world of semiconductor manufacturing machines via photolithography systems in Veldhoven on April 17, 2018.
New Chip Restrictions
According to SCMP's source, ASML, which holds a global monopoly in the distribution of extreme ultraviolet (EUV) lithography systems, has issued an internal memo requesting that all of its US employees, including green card holders, to abstain from serving Chinese customers until further notice.
The measure is intended to address compliance issues as a result of a recent US regulation that limits the participation of US citizens in advanced semiconductor facilities in China.
US engineers have also been removed from supporting equipment installed with Chinese clients, including China's top memory chip maker Yangtze Memory Technologies Company, as per a Wall Street Journal report that cited sources familiar with the situation.
These companies include wafer fabrication equipment supplier Lam Research and KLA Corp, which provides process control systems for the semiconductor sector.
As engineers and executives with US passports or citizenship play a significant part in China's burgeoning chip sector, the most recent limitations are anticipated to hurt the country's semiconductor industry.
Suppliers like ASML and KLA, as well as their Chinese customers, would suffer from the blows, according to Wang Lifu, an analyst at the Shanghai-based semiconductor consultancy ICWise.
ASML, a Dutch company with its headquarters in Veldhoven, started operating in China in 2000 and it now owns 12 office buildings in the company.
According to the company's website, Lam Research has a variety of employment openings in Shanghai, including positions for technologists and field service engineers, which only indicates that China is a significant market for the company.
US-China Tech War
China has criticized the US for tightening the restrictions on its access to semiconductor technology. The Biden administration imposed fresh export restrictions against China on October 7 after weeks of strikes on the country's chip supply.
This information comes after the US government proposed and is actively enforcing a new policy that would restrict the sale of computer chips required for supercomputers and artificial intelligence to Russia and China.
NVIDIA was informed by the government that the new licensing requirement would address the danger that China and Russia would utilize the impacted products for military purposes.
China is moving closer to its aim of being a world leader in artificial intelligence by 2030, according to research published by the Center for Security in Emerging Technology (CSET) due to semiconductors made by American companies.
Based on 97 publicly available documents of the Chinese military's procurement of AI processors, most of them were developed by American firms Nvidia, Xilinx (now AMD), Intel, or Microsemi, according to the research.
Defense One noted that Asian companies like Samsung in South Korea and Taiwan's Taiwan Semiconductor Manufacturing Company are reportedly producing the aforementioned US-designed semiconductors in massive quantities.
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Written by Joaquin Victor Tacla
