Cabinet sets export restrictions for ASML as Samsung delays orders with the company

ASML is one of the companies that are hit by new licensing requirements set by the Dutch government. Companies that want to export specific “high value and sensitive technology” to countries outside the European Union (EU) need to have export licenses from Friday. This comes shortly after it was reported that Samsung has postponed taking deliveries from the company.

Minister of Foreign Trade and Development Reinette Klever stated the new rule in a letter to the Tweede Kamer, the lower house of the Dutch parliament. This means that ASML will need to receive a license from the Dutch government to export chip machines.

According to Klever, the government imposed the restrictions primarily for "national security reasons.” The minister claims national security could be at risk if important technology falls into the wrong hands. “Moreover, these measures can maintain a level playing field, as other countries have announced and implemented similar measures,” the minister wrote, pointing to US export restrictions.

It was reported by Reuters on Friday morning that South Korean electronic company Samsung has delayed ordering chip machines from the Dutch market leader due to an insufficient number of customers for a new chip factory in Taylor, Texas in the United States. Samsung has also sent employees home due to the lack of demand.

ASML presented disappointing results this week and lost a great deal of stock market value. The chip machine manufacturer from Veldhoven received fewer orders than expected in the past period due to disappointing demand from sectors other than artificial intelligence (AI).

Samsung needed advanced machines based on extreme ultraviolet (EUV) lithography from ASML, which cost 200 million per piece and are important for making chips for smartphones and AI servers. According to a source, the intention was for this to be delivered earlier this year, but they have still not been sent yet.

For Samsung CEO Jay Y. Lee, the 17 billion dollar Texas factory is essential to compete with market leaders TSMC and SK Hynix in the field of the most advanced chips. Those competitors are ramping up their production significantly to meet the high demand for chips for AI applications.

Shares in ASML recovered some of the heavy losses suffered in trading on the Euronext Amsterdam exchange on Friday, rising by about 4 percent after the market opened. The price fell a bit towards the end of the morning, but held above 653 euros for most of the afternoon, representing a 3 percent increase for the day. It then jumped up to over 665 euros in a rally beginning around 2 p.m.