This photo taken in Brussels, Belgium, on January 4, 2024, shows an ASML icon next to the American and Chinese flags on a circuit board.
Jonathan Ra | Noor Photos | Getty Images
Shares of major global semiconductor equipment companies rose sharply on Thursday after reports that the United States was considering imposing sanctions on China’s chip industry but fell short of previous proposals.
ASML It rose about 3.6% in early European trading. Tokyo Electronics In Japan, where it trades, the price rose more than 6%.
Bloomberg There were reports on Wednesday that Washington is considering further steps to restrict sales of semiconductor equipment and artificial intelligence storage chips to China, but the new rules may be different than previous proposals that were seen as more stringent.
The Commerce Department’s Bureau of Industry and Commerce did not immediately respond to a request for comment on the Bloomberg report.
The United States is currently considering reducing the number of suppliers to Chinese technology giant Huawei to an export blacklist known as the “Entity List.” According to the report, one major Chinese company that will not be included is Changxin Storage Technology Co., a storage company and potential competitor to companies such as SK Hynix and Samsung.
Jefferies analysts said ASML had previously expected revenue from China to fall 30% next year. Jefferies said on Thursday that excluding the company could mean ASML’s sales in China “fall less than expected next year.”
Dutch company ASML has become the focus of a battle over semiconductor technology between the United States and China due to its key position in the wafer supply chain.
ASML makes the machines that chipmakers need to make state-of-the-art semiconductors. Due to various export controls, these machines have not yet been exported to China. Recently, the Dutch and U.S. governments have imposed restrictions that make it more difficult for ASML to export some of its less advanced machines to China.
The company sells its machines to “fabs,” or factories, that actually make the chips, such as those in Taiwan British Semiconductor also SMIC in China. Any rules that hit demand or directly target semiconductor manufacturers will have a negative impact on ASML.
The Bloomberg report suggests that further sanctions being considered would target Chinese companies that make semiconductor manufacturing equipment, rather than the factories that actually make the wafers. It’s also a boon for ASML and other foreign semiconductor equipment companies that sell to fabs.
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