Will ASML escape the latest US export restrictions? It’s not looking good

ASML is currently “assessing the potential implications of the new regulations, if any, and can’t comment at this moment.” But studying the documents and taking in government officials’ comments, it seems unlikely the lithography equipment maker will be able to escape the sweeping export controls announced by the US Department of Commerce last week. Even if the current wave of restrictions somehow fails to prevent ASML from supplying DUV equipment to Chinese companies, a next one will. After all, it has become abundantly clear that the US won’t stop before China has been cut off completely from all advanced semiconductor-related technology.

The US has essentially broadened a provision known as the Foreign-Direct Product Rule. This restriction bars any company from supplying Chinese organizations with semiconductor technology that has been developed or manufactured using a US technology company. The rule was first used to starve Huawei of semiconductors, initially by preventing TSMC to manufacture chips for the Chinese telecom outfit and later by also blocking direct sales of chips to the company. The results have been devastating.