According to a report by the Economic Daily News, TSMC’s first high numerical aperture extreme ultraviolet lithography (High-NA EUV) equipment will arrive this month, aiding the company in progressing its advanced process technology.

Regarding these rumors, ASML stated on September 9 that it does not comment on individual customers. TSMC has also declined to respond to market speculation.

The report has cited industry rumors, pointing out that TSMC’s first High-NA EUV machine is expected to be moved to its Global R&D Center for research purposes, addressing the development needs of future advanced processes like A14.

As for pricing, it’s reportedly rumored that TSMC President C.C. Wei personally negotiated a favorable deal, reducing the overall price by nearly 20% through a combination of purchasing the new equipment while also selling older models.

The same report further suggests that the High-NA EUV is priced at over EUR 400 million. Due to the inability to disassemble the optical lens components, the equipment is taller than a conference room and significantly longer than the previous generation. 

The report, quoting statistics, claiming that TSMC is currently the world’s largest holder of extreme ultraviolet (EUV) lithography systems, estimated to account for 65% of the global EUV wafer equipment output. It was also said to be the first manufacturer to introduce EUV equipment into the 7nm process.

ASML has already received orders for next-generation products from all of its EUV equipment customers.

Greet Storms, ASML’s Vice President of High NA EUV Product Management, recently stated that ASML is advancing new technologies and has gained the support of all EUV customers during the R&D phase.

She addressed that, these customers, who have also placed orders for High-NA equipment, are expected to move toward mass production by 2026, although the timeline will ultimately depend on customer process costs and other factors.

ASML had previously confirmed that it will deliver its latest High-NA EUV to TSMC by the end of this year. ASML emphasized that the next-generation EUV equipment began shipping at the end of last year, with a capacity to expose over 185 wafers per hour.

This will support mass production of sub-2nm logic chips and memories with similar transistor densities.

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• [News] ASML’s Second High-NA Equipment to be Installed in Intel’s Oregon Fab Soon
• [News] Price for ASML’s Hyper-NA EUV Rumored to Double, Causing TSMC, Samsung and Intel to Hesitate

(Photo credit: ASML)

In late August, it is said that the Netherlands mulls to ban ASML, the country’s semiconductor equipment giant, from conducting equipment maintenance and providing related backup components in China. Now the latest regulation has been revealed, as the Dutch government announced last Friday the expansion of export restrictions on advanced semiconductor manufacturing equipment, which covers two of ASML’s DUV immersion lithography systems, according to a report by CNBC.

The new export control rule, which took effect on September 7^th, indicates that ASML will now have to apply for licenses with the Hague rather than the US authority for some of its machines, as the Dutch government regards these curbs as a critical measure for national security, and attempts to gradually take the initiative rather than following the U.S., a report by Bloomberg notes.

According to the official announcement made by ASML, the new rule will require its TWINSCAN NXT:1970i and 1980i DUV immersion lithography systems to obtain a license from the Dutch government before being exported. The Dutch export license requirement is already in place for ASML’s TWINSCAN NXT:2000i and subsequent DUV immersion systems.

Regarding ASML’s sales in lithography units in the second quarter of 2024, China emerged as the largest market, as it contributed 49% of the revenue, higher than South Korea’s 28% and Taiwan’s 11%.

Interesting enough, ASML refers to the updated license requirement as “a technical change,” and is not expected to have any impact on the company’s financial outlook for 2024 or for its longer-term scenarios.

The latest move from the Dutch government is less harsh than the rumors earlier, which indicated that the Netherlands might ban ASML from conducting equipment maintenance and providing related backup components in China. The measure, if implemented, would be a heavy blow to China’s semiconductor industry, especially on the development of advanced nodes.

In response, China has expressed “dissatisfaction” with the Dutch government’s decision to expand export controls on ASML chipmaking equipment, according to the statement by the Chinese commerce ministry on Sunday, cited by Reuters.

The ministry urged the Dutch government not to misuse export controls, to avoid actions that could harm Sino-Dutch cooperation in the semiconductor industry, and to protect the “shared interests of Chinese and Dutch enterprises,” according to Reuters.

Beijing has consistently been criticizing Washington’s approach of pressuring allies like the Netherlands and Japan to implement export controls aimed at limiting China’s access to advanced chips and chipmaking equipment.

Read more

• [News] ASML Claims the World Counts on China for Legacy Chips; So Do Chip Equipment Giants
• [News] ASML Might Not Be Able to Provide Advanced Chipmaking Maintenance Services to China as Early as 2025

(Photo credit: ASML)

Amid the escalating tech war between China and the US, along with rising geopolitical tensions, China has accelerated its import of chip manufacturing equipment since the middle of last year to counter potential US chip sanctions, with Dutch company ASML and Japanese company Tokyo Electron (TEL) benefited the most.

Notably, according to the Semiconductor Equipment and Materials International (SEMI), despite US sanctions preventing China from acquiring advanced EUV lithography equipment from ASML, it reported that China’s spending on chip manufacturing equipment has reached USD 25 billion in the first half of this year, exceeding the combined total of Korea, Taiwan, and the US. SEMI data also shows that China’s spending remained strong in July and is expected to set a new annual record.

Meanwhile, per the trade data from China’s General Administration of Customs cited by Bloomberg, from January to July this year, Chinese companies imported chip manufacturing equipment worth nearly USD 26 billion, surpassing the previous record set in the same period in 2021.

SEMI projects that China will become the largest investor in new fab construction, including equipment purchases. It is expected that the country’s total spending on chip equipment for the entire year of 2024 will reach USD 50 billion.

Clark Tseng, SEMI’s senior director of market intelligence, further highlighted that at least more than 10 tier-two chip manufacturers are actively purchasing new equipment, which is driving China’s overall spending.

China is now reportedly the largest market by revenue for top global chip equipment suppliers. The latest quarterly financial reports from companies such as Applied Materials, Lam Research, and KLA show that China contributes approximately 40% of their revenue.

For Japanese company TEL and Dutch company ASML, the contribution from the Chinese market is even more significant, with nearly half of their revenue coming from China.

Additionally, per a report from Commercial Times, amid a global economic slowdown, China is the only region where chip manufacturing equipment spending increased in the first half of this year compared to the same period last year.

Tseng also noted that SEMI anticipates spending on new plant construction in China will “normalize” over the next two years.

Read more

• [News] China’s Import of Chip Making Equipment Hit New High This Year, with Mature Nodes Driving the Demand
• [News] China Contributes Over 40% of U.S. Chip Equipment Makers’ Revenue despite Export Controls

(Photo credit: iStock)

According to an earlier report from Bloomberg, the Dutch government may restrict ASML’s after-sales services for Chinese customers. Regarding the matter, the Dutch Prime Minister Dick Schoof has stated that the government’s decisions will prioritize ASML’s actual interests to avoid jeopardizing its global position, according to a report by Reuters.

ASML derives about 20% of its total revenue from after-sales services. Per the same Reuters’ report, while Dick Schoof did not comment on rumors that Netherlands would put more curbs on ASML’s China chip business, he highlighted that negotiations are progressing smoothly.

Moreoever, the Dutch government is particularly focused on balancing ASML’s interests with other risks, as the authority has acknowledged that the economic interests are extremely crucial, he noted.

He reiterated that ASML represents an extremely important and innovative industry for the Netherlands and should not face any setbacks, as that would harm its global standing, according to Reuters.

ASML plays a crucial role in the global semiconductor supply chain, as the production of advanced chips heavily reliant on its lithography machines.

Per another Reuters report, in 2023, China became ASML’s second-largest market, accounting for 29% of its total revenue, following Taiwan. This surge in China’s market share was driven by a rush to purchase ASML’s DUV machines before stricter U.S. export restrictions took effect.

Due to U.S. government pressure, the export of the most advanced Extreme Ultraviolet (EUV) lithography machines to China has been banned.

Recently, ASML has expressed dissatisfaction with the Dutch government’s lack of support, with former CEO Peter Wennink even reportedly threatening to relocate the company’s headquarters if its development continues to be constrained.

Wennink has publicly opposed export restrictions to China, warning that such measures could stimulate China to develop new technologies and compete with ASML.

Read more

• [News] ASML Might Not Be Able to Provide Advanced Chipmaking Maintenance Services to China as Early as 2025
• [News] ASML Claims the World Counts on China for Legacy Chips; So Do Chip Equipment Giants

(Photo credit: ASML)

Earlier in July, former ASML CEO Peter Wennick stated that the chip war between the U.S. and China may continue for quite a long time, even for decades. Now his prophecy seems to come true, as the Netherlands is said to ban the semiconductor equipment giant from conducting equipment maintenance and providing related backup components in China, according to the latest report by Bloomberg.

As the targets of the measure reportedly includes ASML’s deep ultraviolet (DUV) lithography systems, if implemented, the move would be a heavy blow to China’s semiconductor industry, especially on the development of advanced nodes, the report notes.

On the other hand, regarding ASML’s sales in lithography units in the second quarter of 2024, China emerged as the largest market, as it contributed 49% of the revenue, higher than South Korea’s 28% and Taiwan’s 11%. Therefore, the reported restriction will be a major setback for the company’s financial performance.

The report from Bloomberg, citing sources familiar with the matter, indicates that the government led by Dutch Prime Minister Dick Schoof is unlikely to renew some of ASML’s licenses for maintenance and the provision of backup components in China, which are set to expire at the end of 2024. These licenses include those related to ASML’s sale of DUV lithography equipment.

The report further suggests that ASML’s products are usually sold with maintenance agreements, which are crucial for the equipment to operate properly and continuously. Therefore, if ASML’s licenses for maintenance and the provision of backup components to China are no longer granted, some equipment may be unable to function properly as early as 2025.

In response to the rumors, both ASML and the Dutch Ministry of Foreign Affairs have declined to comment, Bloomberg notes.

In terms of the reason behind the move, the report states that the decision may be made after the Dutch government received pressure from the U.S. Citing a senior official from the Biden administration, if the super power’s allied countries do not agree to align with Washington on semiconductor controls against China, the U.S. government could propose certain unilateral measures against partner countries, including the use of the Foreign Direct Product Rule (FDPR).

The measure allows the U.S. to control transactions involving foreign products that use U.S. technology, thus is considered to be a tactic leveraged to push its allies, including the Netherlands, Japan and South Korea, to impose restrictions on semiconductor equipment exports to China.

According to a previous report by Reuters, since 2019, ASML has been prohibited from selling its most advanced EUV tool line in China as part of a U.S.-led effort to curb Beijing’s technological and military progress. Afterwards, China had to rely on ASML’s DUV lithography machines to advance in its semiconductor manufacturing technology.

As per a report by Wccftech in May, SMIC seems to be able to use ASML’s old DUV lithography machines to manufacture 5nm chips for Huawei. Therefore, if ASML stops servicing and supplying parts for DUV machines in China in the future, companies like Huawei and its foundry partner SMIC will find it increasingly difficult to make breakthroughs with their existing capabilities.

The latest report by Bloomberg emphasized that ASML’s CFO, Roger Dassen, confirmed in a July earnings call that the company still has employees in the fabs of Chinese customers. Therefore, if the maintenance ban is implemented, ASML will have to withdraw the employees who provide equipment services to Chinese semiconductor companies.

Read more

• [News] ASML Claims the World Counts on China for Legacy Chips; So Do Chip Equipment Giants
• [News] SMIC Reportedly to Manufacture 5nm Chips for Huawei Without EUV Machinery

(Photo credit: ASML)