On an ordinary spring day in April 2024, Dutch lithography machine manufacturer ASML received a disturbing notice. The notice, which came from the Chinese government, undoubtedly shocked and anxious ASML executives like never before.
The Chinese government has given ASML a heavy "choice": either to buy back the lithography machines sold in China in full at a sky-high price of 50 billion yuan in a short period of time, or to be prepared to give up all patent rights in the Chinese market.
This is undoubtedly a heavy punch that fell on ASML.
As the absolute leader in the field of global lithography machines, ASML's extreme ultraviolet lithography (EUV) technology leads the future development direction of the global chip manufacturing industry.
In China, an increasingly important market, ASML's lithography products are widely favored and contribute to the company's profits. However, just when ASML was immersed in the prosperity of the Chinese market, the sudden bombshell undoubtedly made them feel extremely stressed and troubled.
The reason for this is undoubtedly the Chinese government's response to ASML's unfavorable behavior in the past. At the instigation of the United States, ASML has imposed a series of strict technology blockade policies on China in an attempt to hinder the development of China's semiconductor industry.
Now, the Chinese side has decided to teach ASML a lesson at a terrible price, forcing it to abandon its technological blockade of China.
For ASML, this was a difficult decision. On the one hand, the Chinese market is crucial to its strategic position, and if it is forced to lose this core market, it will seriously weaken its dominant position in the global chip industry.
But on the other hand, to raise up to 50 billion yuan of repurchase funds in a short period of time is undoubtedly an astronomical amount, enough to shake the foundation of ASML.
What's more, even if ASML can barely scrape together this sky-high price, I am afraid that it will have to deplete most of the company's cash reserves and face the risk of bankruptcy.
It is conceivable that when ASML's top management received the ultimatum from the Chinese side, they must have shown a look of panic and panic on their faces. After all, ASML, as a tech giant, never imagined that it would be in such an embarrassing position that it would either lose all its money or lose the Chinese market.
This has undoubtedly plunged ASML into a heated debate and internal contradictions, with executives struggling to weigh the pros and cons.
Tough situation
As the absolute leader in the field of global lithography machine manufacturing, ASML's position in the Chinese market is undoubtedly indestructible. With its world-leading EUV technology, ASML's lithography machine products are widely favored in China, an increasingly important market, generating huge profits for the company.
However, just as ASML was basking in the boom of the Chinese market, a dark wind originating in the United States suddenly hit, bringing serious challenges to the Dutch technology company.
At the instigation of the U.S. government, ASML has implemented a series of harsh export control policies against China in an attempt to curb the pace of development of China's semiconductor industry.
This undoubtedly sparked strong dissatisfaction from the Chinese government, which eventually led to a tough counterattack by the Chinese side.
Just when ASML was still dealing with the whirlpool of contradictions between China and the United States, a bombshell fell again. The Chinese government issued an ultimatum to ASML: either buy back the full amount of the lithography machines sold in China at a sky-high price of 50 billion yuan, or it is ready to give up all patent rights in the Chinese market.
This unprecedented requirement has undoubtedly pushed ASML to the brink of no return.
For ASML, the loss of the Chinese market is undoubtedly its biggest nightmare. It is estimated that ASML has sold a significant number of lithography machines in the Chinese market, with a total value of up to a staggering 500 billion yuan.
This means that if ASML were to buy back the equipment in full, it would probably have to deplete most of the company's cash reserves. What's even more troubling is that even if ASML can barely scrape together 50 billion yuan of repurchase funds, it will undoubtedly seriously shake its foundation and bring it to the brink of bankruptcy.
The other option, giving up patent rights in the Chinese market, was a heartbreaking decision for ASML. After all, ASML's patented assets are its valuable intangible assets, containing the valuable scientific and technological wisdom accumulated by the company in the field of lithography machines for decades.
Once forced to give up the patent licensing in China, it is equivalent to giving these valuable technological achievements to others in vain, which will undoubtedly bring a heavy blow to the future development of ASML.
It is conceivable that ASML must have been caught up in a fierce controversy and internal contradictions. On the one hand, they know that if they lose China, a core market, it will be tantamount to the end of their future development path. But on the other hand, it really can't afford China's sky-high repurchase request.
In this "life-and-death" game, ASML's executives are undoubtedly under tremendous mental pressure, struggling to weigh the pros and cons.
Those who witnessed it may be able to vaguely feel that when ASML's senior management received the Chinese ultimatum, they must have a look of panic and panic on their faces. As a leading tech giant, ASML probably never imagined that it would be in such an embarrassing position, facing the dilemma of either losing all its money or losing the Chinese market.
China's chip industry is accelerating independent innovation
While ASML's position in the Chinese market is crucial, the Chinese government and companies have realized that they must accelerate the pace of independent innovation and reduce their dependence on external technologies amid the fierce rivalry between the Chinese and American semiconductor industries.
Academician Wuhan Ming, a well-known Chinese scientist, once clearly pointed out: "Compared with the 7nm process, which is completely dependent on foreign imports, the 55nm and 28nm processes, which have extremely high control over local productivity, are of greater significance."
These words illustrate the current predicament faced by China's semiconductor industry. As the core of today's various high-tech products, chips are used in both civilian and military applications, and cannot rely solely on imported technology.
It is based on this understanding that the Chinese government and enterprises have begun to promote independent innovation and achieve self-sufficiency in the field of low- and medium-end chips. As it turned out, this strategy really worked: after 2022, the global chip market situation cooled down significantly, and industry giant TSMC even had to temporarily shut down higher-level EUV lithography machines in order to save money.
In stark contrast, SMIC, a local chip company in China, has made great progress in the 28nm mature process market, and its shipments have maintained a steady and rising trend.
The reason for this is mainly due to the wide application of 28-nanometer chips in China in the fields of new energy vehicles and smart interconnection. Although the data may seem insignificant, SMIC's total expenditure in the first half of 2022 has been revised upwards by a staggering 45.6 billion yuan, while industry giant TSMC has had to frequently adjust its full-year spending plan and is in a difficult situation.
The key reason why SMIC is so good in the 28nm chip market is that it has already laid out the mature industrial chip market, with a monthly production capacity of up to 700,000 pieces, and the yield rate is far ahead of its competitors.
In contrast, latecomer TSMC wants to get a piece of the pie, and it is too late.
This also shows that in the context of the struggle between the semiconductor industry between China and the United States, Chinese companies are accelerating their efforts to the low-end chip market, and gradually getting rid of their dependence on external technologies through technological breakthroughs and capacity building.
Although these low-end chips may not be comparable to high-end chips at present, they are precisely the key to meeting more than 90% of China's demand.
At the same time, Chinese companies are also accelerating the pace of independent research and development in the field of high-end chips. Although it is not yet possible to completely replace advanced processes such as 7nm, the goal of China's semiconductor industry is no longer to barely survive in the high-end market, but to achieve self-sufficiency in low-end chips, so as to lay a solid foundation for subsequent technological breakthroughs.
It can be said that Chinese enterprises are steadily advancing towards the road of independent innovation in the semiconductor industry with unstoppable steps. Whether in the field of low-end or high-end chips, China is accelerating the narrowing of the gap with the world's advanced level.
This can't help but make people full of confidence in China's future development in the semiconductor industry, and believe that in the near future, China will make major breakthroughs in key core technologies and truly achieve the goal of "independent and controllable".
importance to China's semiconductor industry
Undoubtedly, lithography machine technology is a crucial core equipment in the chip manufacturing process. As a global leader in the field of lithography machines, ASML has played a key role in promoting the development of the global chip industry with its leading EUV technology.
However, it is precisely because of ASML's monopoly position in this field that China has long relied on imports in the field of lithography machines, which has become a "bottleneck" technology that restricts the development of China's semiconductor industry.
Academician Wuhan Ming, a well-known Chinese scientist, once clearly pointed out: "The application field of chips is extremely wide, not only including civilian fields, but also involving military use, so the production of chips must not only rely on foreign imports, which is directly related to the future development trend of the mainland."
It can be seen that independently mastering key core technologies such as lithography machines has become an urgent and important task for China.
If China cannot achieve a breakthrough in the field of lithography machines, then the development of China's semiconductor industry will always be controlled by others and forced to rely on the technical support of other countries.
This will not only affect China's voice in the global semiconductor industry chain, but also seriously restrict China's innovation ability in key areas. In the event of an external blockade, the consequences are unimaginable.
It is based on this understanding that the Chinese government and enterprises have begun to attach great importance to independent innovation in the field of lithography machines. Judging from the current situation, this goal is by no means an easy task and requires hard work.
However, as long as China has firm confidence and accelerates the pace of research and development, I believe that one day, China will be able to make breakthroughs in this key area.
At present, ASML is trying to impose a strict technological blockade on China's chip manufacturing industry through the support of the United States. However, this external pressure has stimulated the morale of Chinese companies in the research and development of lithography machine technology.
The Chinese government has issued a clear warning to ASML in a tough manner: either it will buy back equipment in China with huge sums of money in the short term, or it will be ready to give up its patent rights in the Chinese market.
This heavy-handed approach has undoubtedly dealt a heavy blow to ASML, putting it in a dilemma.
To a certain extent, the Chinese government's move is an attempt to force ASML to voluntarily abandon the technology blockade against China by forceful means, so that Chinese companies have the opportunity to achieve breakthroughs in the field of lithography machines.
As long as ASML finally succumbs and no longer hinders China's development in this key technology field, then Chinese companies will seize this rare opportunity to go all out to carry out independent research and development.
It should be emphasized that even if ASML eventually chooses to withdraw from the Chinese market, Chinese companies will not stop there. On the contrary, they will further enhance their determination and courage for independent innovation in this "life-and-death" strategic game.
As long as we make unremitting efforts, I believe that Chinese enterprises will be able to make breakthroughs in key core technology fields such as lithography machines, and truly achieve the goal of "independent and controllable".
This will undoubtedly lay a solid foundation for the future development of China's semiconductor industry. Once it has its own self-developed lithography machine technology, China will be able to dominate the global semiconductor industry chain and will no longer be controlled by others.
This will undoubtedly pave the way for the take-off of China's semiconductor industry.