The agreement between the US, the Netherlands and Japan to restrict the export of certain types of semiconductor equipment to China won’t affect ASML’s rosy prognosis issued last week. “In combination with the current market situation, we don’t expect these measures to have a material effect on the expectations we’ve published for 2023,” a spokesperson told Bloomberg.
Little detail of the framework agreement, reached last Friday, has been made public, but reportedly, the supply of more advanced immersion scanners to Chinese customers will be regulated. This would be in line with the control measures unilaterally issued by the US in October, which restrict chip-making gear that can be used to manufacture sub-14nm chips.
More details might never be officially disclosed, Dutch Prime Minister Mark Rutte has hinted. “If something would come out of this, it’s questionable if this will be made very visible,” he said before word of the agreement reached the public. “This is such a sensitive topic that the Dutch government chooses to communicate diligently, and that means that we only communicate in a very limited way.”
It will take time for the agreement to be detailed out and implemented into legislation – the industry at large is still grappling with the unilateral US restrictions, ASML CEO Peter Wennink said last week. This is probably part of the reason why his company doesn’t expect a significant impact this year.
Another reason why the restrictions likely won’t affect ASML’s bottom line, for now, is that demand for litho equipment far exceeds the company’s production capability. And, finally, (advanced) immersion scanners may represent only a limited share of ASML’s sales in China. Last year, Chinese customers were responsible for 14 percent of ASML’s systems revenue, down from 16 percent in 2021.