Due to Western export restrictions, ASML is only allowed to export some of these machines to China; the most modern equipment is subject to a complete blockade.

In the past quarter, 14 percent of the machines that ASML sold went to China.

Play stupid games and win stupid prizes.

Preventing one of your biggest customers (China) from getting the equipment they need forces them to make it themselves.
Now China can make their own DUV lithography machines of similar quality to the ones they can get from ASML.
And obviously it won’t stop there, China will continue to improve, and probably in a few years compete with ASML on the high end EUV equipment too.

That and the NVIDIA ban on China both backfired spectacularly

Absolutely, although China can’t match Nvidia yet, they can now make chips that are good enough for 90% of the tasks.
Nvidia can no longer sell their second rate products developed specially for China anymore either.

Worth mentioning that this export restriction was only enforced because of continuous pressure from the US.

maybe we shouldn’t allow USA to decide European foreign policy? Just a thought.

Politicians, and even corporate C-suite, often confuse “cheaper to buy from the incumbent” with “incumbent has impossible-to-replicate technology,” completely ignoring that it’s way easier to invent something the second time.

Technology might have been a barrier in 1960’s China, but they’re a peer nation today.

Of course if China manages to spin major fab capacity of bleeding edge nodes off of this in the next few years they’ll have no use for US chips.

Couple that with the fabs being built in the US currently and Taiwan is losing a lot of strategic leverage…

China is already making really good chips, even in old and “outdated” fabs. Because they came up with techniques for how to squeeze more resolution out of those machines than what was thought possible. So if the DUV technology works, then I’m sure their fabs will make good chips.

ASML is a victim of US sanctions and Dutch/EU spinelessness. China would never had bothered to pursue lithography as serious as it did if US wasn’t continuously trying to stop China on every technological front. The Europeans let US do it in the hope and under the promise that China would never succeed.

I think China would have pursued it regardless, they just might have relied more heavily on European tech then they do now and thus would have delayed their home grown tech. Or if Europe played their cards right would have resulted in a better trade alliance with China and have benefitted both economic areas by exchanging tech advances sidelining the US. This last one might be a bit to much of a utopia though

it’s really inefficient to pursue such a massive research endeavor if ASML was just normally open for business. To do all that work was only justified by it opening a chance in domestic semiconductor production which is the real price for China. Now they are probably also wanting to compete in DUV machines in the future, to recoup the development costs, even if the real price is the self-sufficiency that they bring.

ASML "plunged" right along with the entire tech sector.......

What most people don’t understand is that the more you push China with tariffs, restrictions and sanctions, the more they will become self reliant - especially when it comes to technology. They will not roll over and curl up. Quite the opposite. Such a smart move by Trump’s vasal Mark Rutte to block a commercial company selling to China. Just like with Nexperia. Both backfired hard as China has doubled its efforts to catch up and in case of Nexperia just manufactured these chips locally.

China already has equivalent GPU’s just not as efficient yet. tech-insider.org/huawei-ascend-950pr-ai-chip-nvid…

It’s ridiculous to do that so late in the game, but companies really wanted to outsource production to cheap areas in the 80s and ignore the long term consequences.

Move all our production to a country that doesn’t respect foreign IP? What could go wrong?

With explicit technology sharing contracts. The name was a hint.

China becoming an industrialized country and the people there slowly getting to a higher standard of living is actually a good thing for us humanists for whom all humans have equal rights.

The problem is just that we need to migrate our thinking from a colonial exploitive mindset to a more sustainable one. The US can in principle just rebuild all the industry it lost and everything is fine until the oil finally runs out.
But the EU needs to start accepting that they are not rich on natural resources and that the countries which are, are becoming less reliant on imports. That means that the EU will run out of things to give in exchange for resources. If resources can’t be bought anymore, what is already there needs to be recycled to almost 100%. And no bloc can long-term be dependent on energy imports because when everyone is industrialized, everyone has basically unlimited use for energy.

The solution is self-sufficiency on a bloc level. China, Russia, and the US should have no problems being their own blocs. Everyone else needs to overcome the disputes with their neighbors and create or join a bloc.

Europa is having the discussion. You see one camp that wants to shut down exporting of waste and demand full recycling and local production. And the other group that’s basically complaining it’s more expensive again ignoring long term consequences.

The housing bubble that popped in china wiped out twice as much capital for Chinese citizens as the 2008 housing and banking crash in the world. Their standards of living have been decaying since 2020 and there is no sign of improvement honestly. Quite the opposite as tariffs, lower exports, automation and the AI craze drive unemployment.

What most people don’t understand is that they don’t play by the rules and should not play with us at all.

Like everyone should play by the fucked up rules set by the US? It good that at least one major world power doesn’t give a shit about America anymore. The US is forcing all countries to do the same. Europe is trying to break free of the US shackles, China just was first.

If you see how little ceremony there was for President Pedo compared to let’s say the President of Uganda who visited recently - BTW China knows the correct name of each country in Africa unlike the clown show that is the US - you know how little respect they have.

reuters.com/…/us-government-map-africa-mislabels-…

apnews.com/general-news-b40414d22f2248428ce11ff36…

The rules are made up. The market is deciding.

Markets do have rules, though; rules are essentially all they are. If you play by a different set of rules than me, depending on what they are, it could result in one of us always winning every interaction because of the way the rules fail to line up.

In those scenarios, we have to be OK with that, agree to the same rules, or decide independently or together to play separately. Instead, we’re choosing option #1 and bitching incessantly about the unfairness. We can try the other options, but elites, at least until very recently, have been content to sell the future for more in the present. Now that it is “the future”, its biting them too and they suddenly see the issue.

I think people are starting to become a lot more aware of what advantages are given up by changing the status quo. Not just w.r.t. China, but with a lot of American products, such as cloud, payment providers, operating systems, document processors etc.

Still, this can be abused in the short term on the stock market, so I doubt things will change much.

I’m concerned this will allow China to become even more totalitarian and militarized because they won‘t fear sanctions as much anymore. But on the other hand they won‘t crash the entire world economy when they invade a neighboring nation that way. You lose some you win some but ultimately we‘ll have to see and wait how it plays out.

You mean the US I assume. Except they did invade a neighboring country illegally remove a sitting president. Only to make the 12 billion dollars in revenue dissappear. cfr.org/…/the-u-s-took-over-venezuelas-oil-indust…

But no, let’s shit all over China being the bad entity in the world here.

Yay! Lower prices and an accelerated pop of the data center AI.

If the sheer incompetence would stay consistent, US companies would start to buy chinese vcards and maybe even their inventory of underpowered nvidias. The American way is to play bait and switch without even baiting. It is to poke own eyes out to win at poker.

To be fair: Yes, we do have that pipeline. But we do not have long-term strategic government funding of strategically important industries - especially not Dutch ones. China tries to plan a century ahead (and seems to actually be able to plan a few decades ahead). No western government seems to plan further ahead than an election cycle.

A centralized guaranteed stable government has different opportunities to plan ahead than a government which has to primarily care about being reelected. Our simulation of democracy isn’t free. The massive election theater and lobbying comes with huge price tags (which are mostly invisible to the public until no one can afford to have kids anymore).

We make them, then force them to flee fascism. We’ve had a massive brain drain since dipshit donnie took office.

At this point I’ve accepted that the USA has ceded(purposefully?) its top spot on the world stage to China.

ASML is Dutch.

We were ordered by the US to cede our top spot.

Some of it translated

If China manages to produce the DUV machines itself, it could cost ASML billions of euros in the long run. In the last quarter, 14 % of the machines ASML sold went to China. The Veldhoven‑based manufacturer expects to earn 20 % of its revenue from China this year. If the revenue forecast, recently revised up from €43 billion to €45 billion for this year, materialises, that would correspond to roughly €9 billion.

Further testing

For now ASML does not seem to have to worry. Chinese technology is not yet as advanced and reliable as that of the Dutch company. Before mass production can start in China, the machines still need to be tested. This year China is reportedly starting production of five machines; a year later that number is expected to rise to twenty.

Although ASML appears to retain its lead for the moment, investors were spooked on Monday. The ASML share ended 8.5 % lower, the lowest level since early June. Dutch rivals Besi and ASM also fell sharply, losing almost 10 % and more than 7 % of their value respectively.

Huh? I thought that the current generation of fabs were embargoed via sanctions by the us. At least for “bad” actors.

When the us intelligence community announced that China had gotten hold of a recent machine asml vehemently denied that they ever sold one directly or that they could be moved without asml noticing. Not to speak of the know how needed to get it back up and running. I brlive them In these points.

This translation goes kinda against that. Anybody know how the situation above played out?

It talks about DUV (deep ultra violet), last generation, not EUV (extreme ultra violet). So China is now a competitor on part of ASML’s market where they held about 95% market share, not on their 100% top of the line models that can go even more detailed.

Since ASML DUV line has been around longer they worked on increasing stability and performance, so likely they won’t be outperformed globally, yet. But China has extra incentive not to buy Dutch since they won’t sell them EUV. This will have a noticable effect on their revenue, but it’s speculation as to how much revenue they will loose unless China mandates their own product.

Also, ASML is increasing DUV capabilities beyond the laser input size + lenses with a bubble of water which changes the refractory index which lays on top of the wafer, no idea if that is in the Chinese products. If it isn’t we are basically talking about the 4th gen machine. It’s DUV, DUV + water, EUV (needing mirrors since lenses now absorb this light), EUV with increased height requirements for the clean rooms).

The fabs in use for the latest chips are typically 1 to 2 generations behind, because it’s expensive and takes a long time to get a new fab in place (these are extremely sensitive machines). Even if China could produce the exact fabs most in use today (which is already a little unlikely), ASML themselves are 2 gens ahead.

This will likely reduce prices on older gen chips though, and those were no slumps either.

People act like these series of events have pushed humanity forward. We are seeing the US, EU, and China all try to do as well as they were during the era of freer trade. Unfortunately for both China and the US the primary reasons for them pushing for this less then world is mostly desire to have their respective state dominate more people’s then they can now.

I think for China the drive is more in the sense of trying to escape poverty by industrializing, and securing their supply chains to avoid another century of humiliation.

As well for sure. Just the US also has factions trying to secure well paying union jobs as part of this. Both factions have had a voice towards protectionism but it wasn’t till it was war hawks trying to secure authoritarian (aka fascist) powers made moves did the needle really move.

The Dutch government forced China to make these machines themselves by enforcing the embargo demanded by the US.
Now, China does exactly that. Then they scale up until they have strategic overproduction. Then the surplus gets thrown on the global market for cheap. Then ASML dies.
Goal: Prevent China from getting the tech.
Actual effect: The west becomes dependent on China for the tech.

As usual folks are blind to second order effects.

Accurate. The West was in the Denial stage of Grief back then, believing that China could only copy, not innovate. We’re already at Bargaining now.

Hell yeah! To hell with that chip monopoly. National security my ass!

Go China! You can do it! Make shit affordable again.

Until they steal the IP of whatever company you work for …

based. the future is chinese

After the plunge, it’s still +30% YTD, big deal