ASML to be exempted from new U.S. rules on exports to China: report

The United States government is working on expanding its powers to stop the export of chip machines to China. But it will exempt some allies, including the Netherlands, from the tightened rules, two sources told Reuters. ASML will, therefore, not face further restrictions on which chip-making technology it can export to China.

The Dutch government has long restricted ASML from exporting its most advanced chip machines to China, partly due to U.S. fears that China would use them for military purposes. Last year, the Netherlands expanded those restrictions to also include ASML’s next-most sophisticated machines, also under American pressure. This year, the U.S. government also pushed the Netherlands to block ASML from maintaining or revising the equipment that shipped to Chinese clients before the export ban.

However, according to Reuters, the Netherlands and ASML will be exempt from the Biden administration’s latest move to keep advanced chip-making technology out of Chinese hands. Japan and South Korea will also be exempted.

The expansion of the Foreign Direct Product rule will affect exports from Israel, Taiwan, Malaysia, and Singapore, among others. The extended rule bars several Chinese companies central to the country’s chipmaking efforts from receiving exports from these countries. Reuters could not determine which Chinese companies are involved.

The Foreign Direct Product rule states that if a product is made using American technology, the U.S. government can stop it from being sold even if it was made in another country. According to Reuters sources, the new rule, which is currently still in draft form, also lowers the amount of American content that determines whether a product is subject to U.S. control. This could mean that the U.S. could ban the export of equipment because it contains a chip with U.S. technology.