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The US government won’t take no for an answer for much longer when it comes to denying China advanced semiconductor technology.
ASML is currently “assessing the potential implications of the new regulations, if any, and can’t comment at this moment.” But studying the documents and taking in government officials’ comments, it seems unlikely the lithography equipment maker will be able to escape the sweeping export controls announced by the US Department of Commerce last week. Even if the current wave of restrictions somehow fails to prevent ASML from supplying DUV equipment to Chinese companies, a next one will. After all, it has become abundantly clear that the US won’t stop before China has been cut off completely from all advanced semiconductor-related technology.
The US has essentially broadened a provision known as the Foreign-Direct Product Rule. This restriction bars any company from supplying Chinese organizations with semiconductor technology that has been developed or manufactured using a US technology company. The rule was first used to starve Huawei of semiconductors, initially by preventing TSMC to manufacture chips for the Chinese telecom outfit and later by also blocking direct sales of chips to the company. The results have been devastating.
Now the US wants to move beyond targeting specific companies in favor of broad restrictions on Chinese access to ‘American’ technology. The question is: how much US technology does a product need to contain for it to be subject to the new regulations? Even if the percentage is low enough for ASML to be exempt (ASML has multiple subsidiaries in the US), that percentage can easily be changed. This also happened when the Huawei sanctions proved to contain loopholes.
The US government already convinced its Dutch counterpart to block the export of EUV scanners by appealing to the Wassenaar Arrangement, which controls Western exports of goods and technology that potentially have military uses. The arrangement isn’t an actual treaty and following the recommendations is at the discretion of individual countries.
EUV scanners aren’t specifically included in the Wassenaar List of Dual-Use Goods and Technologies, but lithography equipment featuring a light source wavelength shorter than 193 nanometers is, as is equipment capable of producing patterns with a minimum resolvable feature size (MRF) of 45 nanometers or less. According to ASML, the MRF limit of ArF immersion scanners is 50 nanometers, and hence their export can’t be controlled through the Wassenaar Arrangement.
Earlier this year, it was revealed that the Biden administration has nonetheless been leaning on the Dutch government to also implement an export ban for DUV lithography equipment. “You always liaise with friends when certain goods have broader strategic implications and ramifications across the globe,” Foreign Minister Wopke Hoekstra confirmed.
According to market researcher Trendforce, the updated curbs concern 16nm and more advanced processes for logic ICs, including FinFET and gate-all-around FET architectures. These nodes are well beyond the patterning capabilities of dry lithography, at least in a commercial environment, implying the US is focusing on immersion DUV in particular. The US National Security Commission last year recommended that export controls be put in place for semiconductor manufacturing equipment “capable of producing chips at the 16nm node and below, particularly EUV equipment and ArF immersion lithography equipment.”
Remarkably, however, the new measures seem even more restrictive. The list of controlled items includes lithography equipment capable of “production of a pattern size of less than 2.5 micrometers” and “using a light source wavelength shorter than 400 nanometers.” Commercial 250nm manufacturing started in the late nineties of the previous century.
Prior to publishing, US government officials briefed reporters that the measures are intended to prevent foreign firms from supplying Chinese companies with advanced chips or the tools to manufacture them. The officials conceded, however, that “they hadn’t secured any promises that allied nations would implement similar measures and that discussions with those nations are ongoing,” Reuters writes.
“We recognize that the unilateral controls we’re putting into place will lose effectiveness over time if other countries don’t join us,” Reuters cites one official. “And we risk harming US technology leadership if foreign competitors aren’t subject to similar controls.”
The Biden administration isn’t as boorish as its predecessor, but it clearly expects allies to join the US in denying China access to leading and trailing-edge semiconductor technology. Now that it has barred its own US tool makers from shipping their gear to Chinese-owned companies (the US seems to be willing to make provisions for the supply of China-based fabs owned by non-Chinese), there’s little room to maneuver left for the Dutch government. And it can now tell the Chinese that the US gave it no choice.
Main picture credit: ASML