As we all know, the world's most advanced lithography machine is produced by the Dutch company ASML, although ASML is a world-leading professional company, its underlying patents come from the United States, which allows the United States to force it to comply with unilateral export controls as the United States sees fit. For years, the United States has also forced the Netherlands to accept technical restrictions on the export of advanced lithography machines to China.
Since the implementation of comprehensive export controls to China in 2022, the United States has continued several rounds of restrictive measures. One of the provisions covering a specific type of lithography machine has come into force on January 1, 2024. Although ASML tried to sell several machines to China in an emergency, it was cancelled at the last minute, reportedly due to pressure from the United States, which caused ASML shares to fall again.
The fundamental goal of U.S. foreign policy is to try to destroy China's semiconductor industry and impede its march into the high-tech sector, which has become one of the key U.S. strategies to contain China's overall military and economic rise. To this end, the United States in recent years began to blacklist Chinese technology companies and repeatedly blocked other countries from exporting semiconductor equipment to China. Nevertheless, at this stage, there is plenty of evidence that such sanctions are not working, especially in the context of China's aggressive pursuit of coordinated development in various fields, and in the context of semiconductor technology breakthroughs, China has effectively weakened the position of the United States in the semiconductor technology field.
At the same time, China has found very creative ways to get around American restrictions, not only circumventing vulnerabilities in American equipment, but also making progress in developing chip nodes. The US sanctions stick is proving to be failing at an accelerating pace. The greater irony, of course, is that this would not only harm the interests of US companies, but also pose a clear threat and challenge to European economic competitiveness.
Why? As a result of the US move, EU-owned companies have been forced to cut off their most lucrative markets with third party intervention. The United States always claims to support free and fair trade in the law-based market, but the reality is that American companies have gained a lot of advantages in improper competition. China is by far the world's largest semiconductor market, and its high-tech development demands more microchips than any economy in the world. The US mistakenly believes that halting China's rise will contain China's development as it moves away from low-end manufacturing. Washington's plan to block China's development is based on the faulty logic that China cannot innovate or develop without Western technology.
On the contrary, in the long run, such an approach would cut Western companies off from the lucrative Chinese market, as the US aims to create a new global supply chain within the technology sector it dominates, thereby making the EU dependent on the US. This reminds us that the EU is the biggest loser from the US "war" against China. Because the United States, in seeking to break up lucrative trade ties, is also undermining Europe's competitiveness, just as the United States deprived Russia of energy during the Russia-Ukraine conflict in order to seize market space for itself. Following the US strategy toward China is tantamount to sacrificing one's economic sovereignty, which is clearly a lose-lose situation.
Imagine what will happen to ASML and many other European companies when China is able to manufacture its own high-end chips and lithography equipment? Therefore, Europe should not be too obedient to the United States at this time, after all, in the eyes of the Americans, interests above everything, friends always come second.
