Dutch chipmaking machinery supplier ASML Holding NV gave in to a request by U.S. President Joe Biden to cancel some shipments of equipment to customers in China, weeks before a new export ban goes into effect.

ASML had previously obtained licenses to ship three of its most advanced ultraviolet lithography machines to China before January, when new restrictions on exports will come into effect. However, Bloomberg reported today, citing people familiar with the matter, that the company bowed to pressure from U.S. officials to block those shipments.

The U.S. is attempting to crack down on China’s efforts to build its own semiconductor technology industry, and as part of that initiative it has been working with its allies to block its access to high-end chipmaking machinery. Biden’s administration is reportedly concerned at the progress made in China.

For instance, Huawei Technologies Co. Ltd. recently launched a smartphone with a domestically made chipset that’s said to be as capable as the chips used in Apple Inc.’s most advanced iPhone. Huawei’s chip was reportedly built by Semiconductor Manufacturing International Co., one of the top chipmakers in China, using AMSL’s immersion lithography gear.

ASML told Bloomberg that the Dutch government had “partially revoked” licenses that allowed it to shop certain lithography machines to China. The revocation of those licenses affected a “small number of customers,” ASML said in a statement.

Bloomberg’s sources said U.S. National Security Adviser Jake Sullivan discussed blocking the shipments with Dutch government officials last year. Following those talks, the officials reportedly told Sullivan to contact ASML directly about the specifics of the shipments of immersion deep ultraviolet lithography machines.

Consequently, the shipment of a limited number of ASML’s machines was canceled. Bloomberg said it isn’t clear exactly how many of the machines, which cost tens of million dollars each, were blocked.

The U.S. government has been applying pressure on Veldhoven-based ASML since 2019, when former President Donald Trump kicked off efforts to prevent China from getting its hands on the most advanced semiconductor technologies. Trump’s administration first began blocking the export of certain kinds of chips to China, before later banning the sale of ASML’s flagship extreme ultraviolet lithography machines.

The ban is a problem for China because ASML is the world’s only manufacturer of such machines, which are used to make chips that power everything from PCs and smartphones to cars and military equipment.

The U.S. then expanded its crackdown, pushing the Dutch government to tighten its export rules by restricting shipments of ASML’s DUV machines, which are the second-most advanced product it sells to chipmakers globally. That ban was due to go into effect Jan. 1, and Chinese customers have reportedly been rushing to get their last orders in ahead of it.

Indeed, imports of lithography machines to China increased by more than five times, to $3.7 billion, between July and November. All told, Chinese firms accounted for almost half of the Dutch companies’ sales in the third quarter, up from just 24% in the previous quarter and 8% in the March quarter.

ASML Chief Executive Peter Wennink told investors in October the tightened restrictions will likely impact as much as 15% of its sales in China.

Wennink, who plans to retire from his role in April, has previously argued against the increased export controls, saying they will force China to develop its own technology. “The more you put them under pressure, the more likely it is that they will double up their efforts,” he said in an interview last year.

Photo: ASML