ASML’s CEO expects stable sales in China in 2023 despite the restrictions

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AMSTERDAM: ASML Holding NV’s exports to mainland China in 2023 are likely to remain at last year’s levels despite ongoing US-Dutch government talks about new restrictions on the company’s sales to the country, CEO Peter Wennink said on Wednesday.

ASML, which dominates the market for machines used in one step of the chip manufacturing process, was banned from selling its most advanced EUV machines to Chinese customers in 2019 under pressure from the US for fear they could be used to make chips with military applications.

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The company is still sending older DUV machines to China, although they are now at the center of US-Dutch talks. Such sales amounted to about 2.16 billion euros ($2.35 billion) last year, or 14 percent of total sales, slightly less than the 2.17 billion in 2021.

In an interview with Reuters following the company’s fourth-quarter results, Wennink said he expected sales to China to be “about the same” this year, adding that orders from Chinese companies make up about 15 percent of sales. backlog of the company worth 40 billion euros.

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The EUV machines account for 50 percent of ASML’s sales, Wennink said, noting that the company’s US counterparts such as LAM Research and Applied Materials had not imposed similar restrictions on their own sales to China until Washington in October. announced sweeping new measures in a bid to hinder Beijing’s ability to make chips.

After a meeting with US President Joe Biden last week, Dutch Prime Minister Mark Rutte indicated that while the Netherlands is aligned with the US on security policy, it will not simply adopt the new restrictions.

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China is the world’s largest consumer of computer chips, and Wennink said the first effect of the US rules was to encourage local chip makers to invest in capacity, albeit to make slightly less sophisticated chips.

“They just become very practical,” he said, adding that Chinese customers are investing in chips 20 nanometers and larger — chips that were considered industry-leading before the year 2014.

“This is an area where there is a huge shortage.”

($1 = 0.9175 euros)

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