ASML to Open Facility in Beijing Amid US Sanctions on China

ASML, a leading company in chipmaking technology, is moving forward with plans to open a new facility in Beijing, China, despite ongoing trade tensions between the United States and China.

In its latest Annual Report, ASML announced that it aims to establish a Reuse & Repair Center in Beijing by the year 2025. This decision underscores the significance of China as one of ASML's largest markets,, alongside Taiwan.

This facility will focus on reconditioning and reusing parts from systems that have been returned, rather than manufacturing new products from scratch.

The announcement comes in the wake of heightened restrictions imposed by US authorities on suppliers of chip manufacturing technology. In December, the US added more limitations on metrology tools—which are essential for precise measurements in semiconductor manufacturing—and software. Additionally, the US extended its export blacklist to include several fabrication facilities in China.

In response, the Chinese government has initiated an investigation to determine if US subsidies for chip manufacturers are adversely affecting its own semiconductor companies, labeling these practices as unreasonable.

This occurred just days before the transition to the administration of President Donald Trump, which expressed opposition to the CHIPs Act and implemented higher tariffs on imports from China.

ASML is currently the only global supplier of extreme ultraviolet (EUV) photolithography equipment, critical for producing advanced chips with smaller features, allowing for more circuitry. Several years ago, the Dutch government prohibited the export of these products to China.

Recent reports suggest that researchers in China may have found a way to generate light at a 13.5 nm wavelength, similar to that used in ASML's EUV technology, and are working on developing their technology to bypass existing export restrictions.

According to TechPowerUp, tech giant Huawei is testing new systems in Dongguan with plans to start trial production in September, aiming for mass production by 2026. The company is utilizing a technique called laser-induced discharge plasma (LDP), which is claimed to be more efficient and cost-effective than ASML's laser-produced plasma (LPP) approach.

Amid these developments, IBM has opted to close its Chinese research and development operations, signaling a retreat after 32 years due to the tense relations between the US and China. The closure is expected to affect around 1,800 employees and reflects growing competition from China’s state-supported firms.

Global Industry Reactions

In the chip sector, the Office of the US Trade Representative announced a hearing to investigate allegations that China is aggressively targeting the semiconductor industry to gain a competitive edge.

This investigation highlights China’s ramped-up efforts to increase its production capabilities in older manufacturing processes, which, although not cutting-edge, are widely utilized for various applications, including automotive and consumer electronics.

The European Commission has also expressed concerns that China might flood the global chip market with lower-cost products, potentially harming Western manufacturers.

ASML, China, EUV, Huawei, semiconductors