China’s Xi Jinping Challenges the West in Semiconductor Showdown

Chinese President Xi Jinping meets Dutch Prime Minister
ASML, the ‘One and Only’ based in the Netherlands
The ‘Semiconductor War’ between China and Western Countries

Chinese President Xi Jinping met with Dutch Prime Minister Mark Rutte at the Great Hall of the People on the 27th of last month.

At the meeting, President Xi told Rutte that “no force can stop China’s scientific and technological development.”

This statement is interpreted as targeting the Netherlands, home of ASML, the world’s only manufacturer of extreme ultraviolet lithography machines necessary for making high-end semiconductors. Currently, tensions in the “semiconductor war” between China and Western nations, including the Netherlands, are rising.

President Xi stated, “Artificially creating technological barriers and cutting off industrial and supply chains will only lead to division and confrontation.”

According to ASML, the Dutch government prohibited the export of specific lithography machines to China in January.

This came after the United States ramped up restrictions on the types of semiconductors that American companies can sell to China and pressed its allies to enact their own.

Because of its market dominance, experts have cited ASML as a bellwether of the growing rift between China and the West over access to advanced technology.

President Xi urged Prime Minister Rutte, saying, “The Chinese people also have the legitimate right to development,” and “We hope that the Netherlands will continue to play an active role in promoting mutual understanding and developing constructive relations between China and Europe.”

On the same day, Chinese commerce minister Wang Wentao met with Dutch Trade Minister Geoffrey van Leeuwen and asked for “normal trade” of lithography machines without mentioning ASML.

There was a surge in sales of ASML’s advanced chipmaking tools to China last year — ahead of the Dutch ban.

According to the company, China accounted for 39% of ASML’s total sales in the fourth quarter of 2023. Although that was slightly lower than the 46% in the third quarter, it had increased nearly fivefold from the 8% in the first quarter.

For 2023, China’s share of ASML’s revenue was 29%, doubling from 14% in 2022.