This article was first published by our colleagues at "Capital".
It is an escalation in the geopolitical competition between China and the West: the USA, the Netherlands and Japan have agreed on stricter rules for the export of special chip production machines to China. For many, this may read like a small industry report at first glance, but the step has global implications.
Analysts are already talking about a "cold technology war". The focus is on access to top chips - a hidden champion from Europe called ASML plays a key role. The answers to the top questions about the chip conflict:
High-ranking security officials from the US, Japan and the Netherlands met at the White House in Washington on Friday to agree on stricter export restrictions for special machines that are required for modern chip factories. The new restrictions are apparently intended to paralyze the expansion of the Chinese semiconductor industry - and prevent the local production of top chips. So far, China has been dependent on international suppliers.
From the US perspective, access to high-end chips is a national security issue. Because they are not only installed in the latest smartphones, computers and self-driving cars, but may also be of interest for modern weapon systems.
The USA, Japan and the Netherlands have not yet provided any official information on the content of the new export restrictions. The details are therefore still unclear. According to research by Bloomberg, however, the export of immersion systems, a common variant of the so-called DUV lithography machines, is said to be one of the issues.
On Tuesday, the USA also followed up with a unilateral ban on the Chinese tech group Huawei. The US government apparently wants to freeze corresponding export licenses to prevent American companies from supplying equipment to Huawei. This is reported by several US media. Huawei has been trying to develop lithography machines "made in China" for some time - but so far without any significant success.
Lithography machines are the heart of every chip factory. They print the tiny circuits on the silicon wafer. The following applies: the smaller the resolution, the more powerful the chip. This goes down to the nanometer range - and is therefore technically very demanding.
There are only three manufacturers in the world who master this technology: the Japanese companies Canon and Nikon and the Dutch company ASML. In total, they only produce a few hundred lithography machines each year. Access to them has therefore become a geopolitical matter.
China has long been cut off from part of the chip value chain. As early as 2018, the USA and the Netherlands agreed on an export ban for the most modern lithography machines on the market, which are based on so-called EUV technology. They are only made by ASML. What is new is that due to the three-way alliance with Japan, older machines of the so-called DUV generation are now also on the red list. This mainly affects models from ASML and Nikon.
"The export restrictions are definitely a setback for China," says Julia Hess, who researches the geopolitical role of semiconductors at the New Responsibility Foundation. Building new factories or expanding existing capacities for chips with a resolution of 14 nanometers or smaller would be unthinkable without DUV machines. These types of chips are used in the latest electronic devices, AI applications and smart cars, for example.
The export controls hit the Chinese semiconductor industry to the core, because circumnavigating the ban seems unlikely, at least for the foreseeable future. "China will not be able to develop these machines itself in the short or medium term," says chip expert Hess. The technological lead is simply too great.
The new rules could also cause problems in the existing factories in which the DUV systems are already installed. "Without manufacturer support, China would have a hard time keeping all of its DUV systems running over the long term," said Chris Miller, historian and author of Chip War. Because the highly complex machines are maintenance-intensive.
So far, however, it is still unclear whether the western chip alliance has only agreed on a sales ban - or whether service technicians will no longer be allowed to travel to China without consequences. The details of the new regulations will apparently be worked out in the coming months.