Semiconductors have become one of the most valuable resources of our time, and it is normal because in the end they are also one of the most important pillars of our society. Partially or totally limiting a country’s access to semiconductors can set the country back several decades technologically and, in extreme cases, lead it into a technological “stone age”.
That is precisely what has happened to Russia as a result of the invasion of Ukraine. The country intends to respond promoting their own productionbut this is somewhat easier said than done, because even in the best case Russia would not be able to start production on the 28nm node until 2030. This is a significant setback, since right now we already use the 5nm node, and by 2030 we will likely have passed the 2nm barrier with no problem.
The fact is that Russia is not the only one in the US crosshairs. According to new information shared by Bloomberg, that country is trying to do everything possible to prevent China from meeting its goals of becoming one of the world’s leading semiconductor manufacturers, and it is very clear how to do it, preventing China from accessing a essential advanced machinery for the manufacture of semiconductors.
ASML, one of the world’s leading manufacturers and sellers of leading-edge semiconductor manufacturing machinery based in the Netherlands, is negotiating with the United States a possible restriction on the importation of such machinery to China. These negotiations would have been initiated at the request of the United States government, but it is a very complex issue because ASML would have to assume very large losses in terms of income.
It is not a minor issue, according to the latest information, sales to China represented, in 2021, 16% of total ASML revenue. This means that the company would have to give up almost a fifth of his income to comply with the US request, while at the same time sacrificing future revenue growth that could come from increased orders from China.
China has been one of the countries who has invested the most in machinery for the manufacture of semiconductors in the last two years, and the Asian giant is not willing to take its foot off the accelerator. We don’t know how this will play out, but other large US-based semiconductor tool and machinery manufacturers, such as Applied Materials and Lam Research, are already banned from importing into China, so if ASML decides to ban the import of their products to that country China will have a very difficult time achieving its long-awaited independence at the level of semiconductors.
