The Netherlands have blocked the export of certain lithography systems from semiconductor equipment manufacturer ASML to China, which are required for the production of modern microprocessors. This action was taken in response to the restrictions previously imposed by the USA. As announced by the company on Monday, an export license for the delivery of the lithography systems NXT:2050i and NXT:2100i in 2023 has been partially revoked by the Dutch government.
Since September of last year, Dutch semiconductor companies require the government's permission to sell certain advanced equipment for chip production abroad. This regulation was introduced after Dutch, Japanese, and US security authorities signed an agreement to restrict such exports in order to limit China's access to advanced semiconductor technology.
According to media reports, ASML had previously announced that it would continue to deliver equipment to China despite the restrictions until the end of 2023. The company specializes in photolithography, a process in which light is used to print on light-sensitive surfaces. In a statement, ASML stated that the revocation of the export license and the latest US export control restrictions are not expected to have a significant impact on the financial outlook for 2023.
Stocks of companies in the chip equipment sector will be in the spotlight in 2024, in a continuing positive market environment. However, this has been clouded by reports of supply restrictions for some Chinese customers shortly before the expansion of export restrictions. Since January 1, certain exports of so-called Deep Ultraviolet Lithography Machines (DUV) to China have also been prohibited. According to ASML, the stock temporarily lost 2.57 percent in value in trading on the Amsterdam Stock Exchange and fell to 664.20 euros.
The Dutch company announced that an export license for certain lithography systems has been partially withdrawn. According to the news agency Bloomberg, the government of US President Joe Biden has pushed for an early delivery halt.
ASML states that the license withdrawals will not have a significant impact on the financial targets for 2023. Traders believe that the forecasts for 2024 will not change for the time being. However, the sentiment could change if the rules continue to be adjusted. Investors may opt for a defensive stance out of caution before the start of the tech reporting season, following the industry rally in November and December.
