Chinese President Xi Jinping recently issued a stern warning against attempts to restrict China's access to technology during discussions with Dutch Prime Minister Mark Rutte.
The warning comes amid escalating tensions over chip exports, with the Netherlands imposing licensing requirements on machinery crucial for advanced processor chips in 2023.
Worsening US-China Tech War
The United States blockade on Chinese access to advanced chips and equipment has been triggering a global ripple effect.
Japan and the Netherlands have agreed to join the United States in tightening export controls on chipmaking equipment to China in 2022. The Netherlands reiterated its stance last year, prohibiting ASML Holding from supplying particular immersion lithography machines to China.
Dutch company ASML, the sole producer of machines for advanced semiconductors, found itself at the epicenter of this technological standoff. In 2023, China emerged as ASML's second-largest market, accounting for a significant portion of its revenue.
Dutch PM Visits China
AP reports that Rutte, cautious not to divulge specifics of the talks, emphasized that measures taken are not directed at any single country. However, discussions with Xi and Chinese Premier Li Qiang pivoted around the ongoing conflict in Ukraine.
Rutte underscored the importance of China understanding the direct security threat posed by the war, urging discreet Chinese influence on Russia to alter the course of events.
Despite the geopolitical tensions, ASML's prominence in the global chip market remains unshaken. The Dutch government's recent move to deny licenses for ASML's export of advanced chip-making equipment to China underscores the complexities of maintaining diplomatic relations amidst technological rivalries.
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(Photo : ROB ENGELAAR/ANP/AFP via Getty Images)
This photograph taken on March 27, 2024 in Veldhoven shows containers of Dutch tech giant ASML, which supplies chipmaking machines to the semiconductor industry. ASML is one of the world's leading manufacturers of equipment to make state-of-the-art semiconductor chips, which power everything from mobile phones to cars. ASML announced earlier this year that it had been blocked from exporting "a small number" of its advanced machines to China, amid reports of US pressure on the Dutch government.
'Curbs Will Not Stop Progress'
Chinese media report that Chinese President Xi Jinping assured Dutch Prime Minister Mark Rutte that efforts to restrict China's access to technology won't impede its progress.
"The Chinese people also have the right to legitimate development, and no force can stop the pace of China's scientific and technological development and progress," the president said.
He emphasized China's right to legitimate development and asserted that no external force could halt its scientific and technological advancements.
While the export curbs have had only a modest impact on ASML's financial performance thus far, concerns linger about the company's long-term reliability as a business partner. Chinese chip makers may seek alternatives to ASML equipment, potentially turning to domestic options or Japanese rivals.
The Dutch government faces a delicate balancing act as it navigates between safeguarding national security interests and preserving economic ties. Trade Minister Geoffrey van Leeuwen emphasized the priority of protecting ASML's interests while acknowledging that national security takes precedence.
The ongoing tensions in the semiconductor industry reflect broader geopolitical shifts, with nations vying for dominance in critical technologies. China's push for self-reliance in chip manufacturing contrasts with the United States' efforts to curb its technological ascendancy
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