Netherlands-based ASML and Taiwan-based TSMC have the means to disable the world’s most sophisticated chip-making machines if China intervenes in Taiwan, Bloomberg quoted people familiar with the matter as saying.
Two people, speaking on condition of anonymity, said US government officials have privately expressed concern to their Dutch and Taiwanese counterparts about what would happen in the event of a military intervention against the island, which is responsible for producing the vast majority of the world’s advanced semiconductors.
Two other people said that when the Dutch government approached the company about the threat, it reassured the authorities about ASML’s ability to disable the machines remotely. They added that the Netherlands was running simulations of a possible invasion to better assess the risks.
The remote shutdown applies to Netherlands-based ASML’s extreme ultraviolet lithography machines, known in the industry as EUVs, of which TSMC is the largest customer. EUVs use high-frequency light waves to print the smallest microchip transistors in existence, creating chips with more sensitive military applications as well as artificial intelligence uses.
The critical importance of EUV lithography machines
The EUV machine, which is about the size of a city bus, requires regular maintenance and updates. As part of this, the company could force a remote shutdown, said the people, who spoke on condition of anonymity. The Veldhoven-based company is the world’s only manufacturer of the machines, which sell for more than 200 million euros ($217 million) each.
The EUV machines have helped ASML become Europe’s most valuable technology stock, with a market capitalisation of more than $370 billion.
ASML has shipped more than 200 of the machines to customers outside China since they were first developed in 2016, and TSMC has bought more than any other chipmaker.
EUVs require so much maintenance that without ASML’s spare parts, they quickly stop working. On-site maintenance of EUVs is particularly challenging because they are located in clean rooms that require engineers to wear special suits to prevent contamination.
ASML offers shared service contracts to some of its customers, where it performs some of the routine maintenance itself, allowing customers such as TSMC access to its machines’ systems. ASML says it does not have access to its customers’ private data.
ASML moves to export controls to China under US pressure
ASML’s technology has long been the subject of government intervention to prevent it falling into the “wrong hands”. The Netherlands, for example, banned the company from selling EUV machines to China, fearing that the US would give its rival an advantage in the global chip war.
It was at the behest of the US that the Netherlands began this year to halt exports of ASML’s next most sophisticated chip-making machines. Even before the ban came into force, US authorities had asked ASML to cancel some planned shipments to Chinese customers, Bloomberg reported.
The company expects about 15 per cent of its sales to China this year to be affected by the latest export control measures.
Huawei succeeds in making its own advanced chips
However, the data suggests that the restrictions may have come too late for the US to stop China’s progress in semiconductors.
Huawei last year produced a smartphone to rival the iPhone using chips made on old ASML printers and tools from two US suppliers, Bloomberg reported in October.
Beijing has made technological self-sufficiency a national priority, and Huawei’s efforts to boost domestic chip design and production have been backed by the government.
