The key role of the Netherlands in the chip competition between China and the United States: the balance and choice of lithography machine export policy
In 2023, the competitive landscape of the global chip industry has undergone significant changes. China has made breakthroughs in high-end chip manufacturing, with SMIC announcing that its 14nm process has entered the customer adoption stage, which is a significant improvement over the previous 28nm process. This news marks that Chinese mainland's chip manufacturing process is moving towards the high-end field, which has a far-reaching impact on the global chip supply chain pattern. At the same time, Dutch Prime Minister Mark Rutte is about to pay a multi-day visit to China, and foreign media generally predict that the export of lithography machines may become one of the key topics of the visit. As the home of ASML, the world's most advanced lithography machine manufacturer, the Netherlands plays a pivotal role in the chip competition between China and the United States.
The Dutch company ASML is the world's most advanced manufacturer of lithography machines, and its EUV (extreme ultraviolet) lithography machines are essential for the manufacture of high-end chips. EUV lithography machine can accurately project the circuit pattern on the chip onto the silicon wafer, which is an indispensable key equipment for the production of advanced process chips of 7nm and below. At present, only ASML in the world has mastered the mature EUV lithography machine production technology, which makes the Netherlands occupy a unique strategic position in the global chip supply chain. The United States and China, the world's two largest chip manufacturing countries, are vying to the Netherlands for export support for lithography machines to advance their respective chip manufacturing capabilities.
The United States has lobbied allies, including the Netherlands, to restrict exports of advanced chip-making equipment to China. The United States believes that China is using these devices to develop its military and intelligence capabilities, posing a threat to American national security. To this end, the U.S. government has introduced a series of export control measures to restrict U.S. companies from exporting high-end chips and related technologies to China. At the same time, the United States is also urging allies such as the Netherlands to take similar measures to jointly curb China's chip development. However, for the Netherlands, exporting lithography machines to China is not only about economic interests, but also involves complex geopolitical considerations.
On the other hand, China is vigorously promoting the localization process of high-end chips, hoping to improve its chip manufacturing capacity by acquiring more advanced lithography machines. Chinese chip manufacturers, such as SMIC and YMTC, are actively seeking to import EUV lithography machines from the Netherlands. For China, mastering high-end chip manufacturing technology is not only related to economic development, but also to scientific and technological independence and national security. Against the backdrop of the increasing technology blockade of China by the United States, China needs to obtain the support of key equipment such as lithography machines more urgently to maintain the sustainable development of its chip industry.
The Dutch Prime Minister's visit to China has undoubtedly pushed the issue of lithography machine exports to the cusp of Sino-US chip competition. As a major manufacturer of lithography machines, the Netherlands faces the daunting challenge of balancing between China and the United States. On the one hand, the Netherlands needs to maintain its alliance with the United States and cooperate with the U.S. export control policy to a certain extent; on the other hand, the Netherlands does not want to completely lose China, an important lithography machine market, after all, the vigorous development of China's chip industry will bring huge business opportunities to Dutch companies such as ASML. Therefore, the Dutch government needs to find a delicate balance between geopolitical games and economic interests, and carefully formulate its lithography machine export policy.
During the visit of the Dutch Prime Minister to China, the two sides are expected to have in-depth discussions on the export of lithography machines. China may seek more support from the Netherlands in the export of EUV lithography machines to promote the development of China's high-end chip manufacturing. The Netherlands, on the other hand, needs to weigh the interests of China and the United States, and moderately expand the export of lithography machines to China without violating the relationship with the United States. This requires the Dutch government to show superb diplomatic wisdom and negotiation skills to find a way to balance the complex international situation.
In addition to the export of lithography machines, the Dutch Prime Minister will also discuss other important topics during his visit to China, such as economic and trade cooperation and climate change. As an important economy in Europe, the Netherlands and China have extensive cooperation in the field of trade and investment. The two sides are likely to explore ways to further deepen economic and trade ties in the post-pandemic era and promote the growth of bilateral trade and investment. At the same time, climate change is also a global challenge of common concern to the Netherlands and China. The two sides are likely to discuss strengthening cooperation in areas such as renewable energy and green technology to contribute to the fight against climate change.
The Netherlands plays a key role in the global chip supply chain, and the formulation of its lithography machine export policy will have a significant impact on the chip competition pattern between China and the United States. The Dutch Prime Minister is about to visit China, and the export of lithography machines may become one of the key topics of the trip. Under the game between China and the United States, the Netherlands needs to find a delicate balance between geopolitical considerations and economic interests, and carefully formulate its export policy of lithography machines to China. This will not only test the diplomatic wisdom of the Netherlands, but also affect the development trend of the global chip industry in the future. Regardless of the outcome, the Netherlands' role in the chip competition between China and the United States will be crucial, and its choice of export policy for lithography machines has attracted global attention.