Not long after Shenzhen-based Huawei unveiled what it described as a breakthrough pathway for advanced semiconductor production at the recent IEEE ISCAS conference, the Trump administration raised concerns that one of Dutch chip-equipment giant ASML's extreme ultraviolet lithography, or EUV, machines may have fallen into Chinese hands.
Bloomberg reports that Commerce Secretary Howard Lutnick has raised concerns that one of ASML's EUV machines may have reached China despite US-led export controls.
ASML has pushed back on Lutnick's suggestion, explaining that none of its EUV machines, used to print the tiniest circuit patterns onto advanced computer chips, have ended up in the hands of the Chinese. This report is based on sources from the outlet who spoke on condition of anonymity to describe private conversations.
ASML says all 314 of its operating EUV machines are accounted for globally.
More color from the outlet:
Multiple senior administration officials, speaking on condition of anonymity to describe a sensitive matter, said they have evidence indicating ASML is not acting in good faith — such as exports to China of gear specifically related to EUV tools, which ASML denied to Bloomberg. These US officials, who didn't comment on Lutnick's meetings with ASML, declined multiple requests from Bloomberg for proof of the shipments, citing the sensitivity of the information and sources. They also declined to say whether they have seen evidence of an actual EUV system in the Asian country.
The dispute adds pressure on ASML, with shares in Amsterdam trading down as much as 2% on Friday. Shares have advanced as much as 81% this year due to the AI and data center buildout narrative.
Here is Citi analyst Andrew Gardiner's first take on the US Government-ASML dispute:
According to Bloomberg (6/19), US Commerce Secretary Howard Lutnick has told ASML of concerns that an EUV machine is in China, in contravention of regulations that prevent ASML from shipping EUV to China. No evidence for the claims was provided to journalists. ASML have reiterated publicly they have never shipped a machine or EUV parts to China. ASML can "see" each of the EUV tools running at customer fabs, as the machines send back data to ASML on their operations. ASML are now in the difficult position of trying to prove a negative, when no evidence is being furnished against their position. Given our time spent with ASML over the last two decades, including with current management in recent years, we find it very hard to believe that they would jeopardise their position in the industry, their reputation, or their technological leadership just to deliver an EUV tool to China.
Bloomberg Intelligence analyst Masahiro Wakasugi comments:
US concerns about Chinese chipmakers using advanced tools made by ASML might have little impact on its sales. Bloomberg News reports that in recent meetings, Commerce Secretary Howard Lutnick expressed the concerns to ASML's leaders, saying one of its top machines might have made its way into China, violating US-led restrictions. But ASML says it has never shipped extreme ultraviolet lithography systems to China and has complied with tightening restrictions on deep ultraviolet tools. Also, using ASML machines to make advanced chips would probably require sophisticated tools from other foreign firms that also face restrictions. China is increasingly able to make more-advanced chips with legacy tools, so the US concerns may reflect Chinese engineering progress rather than any lapse in ASML's compliance with export controls.
Related:
US concerns may reflect China's progress in developing advanced chips, especially after Huawei's announcement last month of a potential breakthrough in semiconductor production.