Dutch Treat for China?
The Dutch government’s Ministry of Foreign Affairs published the details of the “Strategic Framework for Export Controls for the Semiconductor Industry” that were proposed on 12/1/2022. The new controls go into effect on September 1 of this year. The framework was put in place, according to the Dutch government, for the following reasons:
The specific products cited are:
EUV Pellets & Pellet production equipment – EUV pellets are small amounts of tin that are vaporized to create the EUV light that is of the correct wavelength and intensity for EUV lithography.
Lithography steppers with a minimum feature size of 45nm or less
ALD (Atomic Layer Deposition) tools using Aluminum precursors and Titanium Aluminum Carbide – These materials are gases that are exposed to the substrate and react to form a single atomic layer that does not react to the high intensity light used in lithography and is hard enough to allow for smaller features.
Epitaxy tools based on the deposition of Carbon-doped Silicon-Germanium – This is a process where the substrate is heated and source material is vaporized, which allows it to react with the substrate a form a thin layer of material on the substrate. Doped Silicon Germanium is used to create transistor base layers that can operate at higher frequency that more typical silicon.
Void-free PVD (Plasma Vapor Deposition) tools that are able to operate in space less than 25nm – PVD tools used is small spaces can create voids or gaps in deposition films that allow etch material to damage other layers. Void-free tools are designed to use higher power plasmas or dual plasma systems that clean the substrate before deposition.
All software or technology needed to operate or develop such tools.
These specifics are technical, the apply primarily to ASML (ASML), the sole producer of high NA (Numerical Aperture) EUV tools for semiconductor production. High NA means the tool can collect and focus more light in a small area, which is necessary to produce product below 13nm. Nikon (7731.JP) also produces EUV tools (<10% share) but focuses on low-NA for the production of product at 13nm or above. The new regulations include DUV systems (also produced by Canon (7751.JP)), which would include ASML’s Twinscan NXT 2000 and similar new products, while ASML’s EUV systems are already under licensing restrictions. ASML issued a press release indicating that the company did not expect the new measures to have an impact on the financial guidance that was released in November of last year, and that the company’s long-term scenarios are based on global industry demand and technology trends rather than detailed locations assumptions, meaning sales to China, and China was not named in any of the government documents.
The Chinese embassy in the Netherlands responded to the newly documented rules as an ‘abuse of export control measures” that violate trade rules and the Chinese government will implement new laws on foreign relations on Saturday that “safeguard sovereignty and rejuvenate the nation”, allowing the Communist Party leadership to set foreign policy rather than the government, and holds anyone committing acts that are detrimental to Chinese national interests legally responsible. Last month the Chinese government banned Boise, Idaho based Micron Technology (MU) from participating in critical infrastructure projects in China, such as telecom infrastructure, networks, and power grids, as they pose a serious network security risk.
- To prevent a situation in which Dutch goods contribute to undesirable end use, such as military deployment or weapons of mass destruction.
- To prevent undesirable long-term strategic dependencies.
- To preserve the Netherlands’ technological leadership position.
The specific products cited are:
EUV Pellets & Pellet production equipment – EUV pellets are small amounts of tin that are vaporized to create the EUV light that is of the correct wavelength and intensity for EUV lithography.
Lithography steppers with a minimum feature size of 45nm or less
ALD (Atomic Layer Deposition) tools using Aluminum precursors and Titanium Aluminum Carbide – These materials are gases that are exposed to the substrate and react to form a single atomic layer that does not react to the high intensity light used in lithography and is hard enough to allow for smaller features.
Epitaxy tools based on the deposition of Carbon-doped Silicon-Germanium – This is a process where the substrate is heated and source material is vaporized, which allows it to react with the substrate a form a thin layer of material on the substrate. Doped Silicon Germanium is used to create transistor base layers that can operate at higher frequency that more typical silicon.
Void-free PVD (Plasma Vapor Deposition) tools that are able to operate in space less than 25nm – PVD tools used is small spaces can create voids or gaps in deposition films that allow etch material to damage other layers. Void-free tools are designed to use higher power plasmas or dual plasma systems that clean the substrate before deposition.
All software or technology needed to operate or develop such tools.
These specifics are technical, the apply primarily to ASML (ASML), the sole producer of high NA (Numerical Aperture) EUV tools for semiconductor production. High NA means the tool can collect and focus more light in a small area, which is necessary to produce product below 13nm. Nikon (7731.JP) also produces EUV tools (<10% share) but focuses on low-NA for the production of product at 13nm or above. The new regulations include DUV systems (also produced by Canon (7751.JP)), which would include ASML’s Twinscan NXT 2000 and similar new products, while ASML’s EUV systems are already under licensing restrictions. ASML issued a press release indicating that the company did not expect the new measures to have an impact on the financial guidance that was released in November of last year, and that the company’s long-term scenarios are based on global industry demand and technology trends rather than detailed locations assumptions, meaning sales to China, and China was not named in any of the government documents.
The Chinese embassy in the Netherlands responded to the newly documented rules as an ‘abuse of export control measures” that violate trade rules and the Chinese government will implement new laws on foreign relations on Saturday that “safeguard sovereignty and rejuvenate the nation”, allowing the Communist Party leadership to set foreign policy rather than the government, and holds anyone committing acts that are detrimental to Chinese national interests legally responsible. Last month the Chinese government banned Boise, Idaho based Micron Technology (MU) from participating in critical infrastructure projects in China, such as telecom infrastructure, networks, and power grids, as they pose a serious network security risk.
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