New US export restrictions sideline Dutch government

By redefining what ‘US technology’ means, the US is restricting ASML’s sales in China more than the Dutch government is prepared to do. In new rules announced last week, the Biden administration has lowered the minimum requirement for certain devices or equipment to be considered ‘American’ to zero percent. This means ASML will now have to get Washington’s approval to sell certain tools to Chinese entities.

The new rule applies to all scanners with a dedicated chuck overlay (DCO) of 2.4 nanometers or better, whereas the Dutch restrictions allow for 1.5 nanometers. DCO is a measurement of overlay performance, the ability to align one chip layer to the next. A low overlay is essential to perform double or multipatterning, which is currently China’s only option to domestically manufacture advanced chips. A recently launched Huawei smartphone is reportedly powered by a 7nm chip, well below the 14nm capability that the US considers ‘safe’ for China to have.