The Biden administration is considering imposing additional sanctions on SMIC, according to a Bloomberg report. “If the proposal is adopted, companies such as Applied Materials, KLA and Lam Research may find their ability to supply gear to SMIC severely limited,” the news agency writes. The additional sanctions may affect ASML as well, putting a lid on DUV lithography equipment sales to China’s largest and most advanced foundry.
Appealing to the Wassenaar Arrangement, which controls Western exports of goods and technology that potentially have military uses, the US pressured the Dutch government into blocking the export of EUV scanners to China two years ago. DUV systems, even the most advanced ArF immersion scanners, aren’t covered by the Arrangement. ASML has been shipping them to Chinese customers unimpeded over the past few years.
Earlier this year, however, the US National Security Commission on AI recommended that DUV immersion equipment should be subject to export controls as well. The US could block ASML’s DUV sales by enforcing export controls on foreign-produced goods containing a minimum percentage of US-origin technology. This tactic was used to cut off Huawei from advanced semiconductor technology.
Last year, ASML’s revenue from system sales in China was 1.9 billion euros, representing 13.2 percent of total revenue. Since the EUV export ban was already in place, these sales were all DUV systems.