ASML profits plunge 40% amid dip in chipmaking tool orders Chipmaking kit maestro ASML generated almost half of its sales from China in calendar Q1, amid a wider downturn in orders and plunging profits. The photolithography giant reported a 40 percent dive in net profit to €1.2 billion ($1.3 billion) for the three months ended March 31, off the back of a 25 percent drop in revenue to …
They've been not the only losers in our trade war. Other semiconductor companies have seen a drop in sales, Apple's lost out with iPhone sales and so on.
I believe it was someone from Xylinx who remarked that sanctions now have a life of their own. Its the problem with creating a bureaucracy; it doesn't know when to stop, indeed it can't stop. Just think what we could do if we put all that energy into creating competitive products. But we have a better plan -- the latest is to "triple tariffs" on metals imported from China; think of it as an indirect taxpayer subsidy to our rump industrial base.
So the US strongarms the Dutch to harm their own company, and at the same time creates strong incentives for the Chinese to create competition. All this without any compensation, and any real leverage. Ban the sales? I can't see Intel, tsmc, Nvidia and others reacting positively to being cut off the ASML machines, both new buys and maintenance - if US government tried that they would be taken to the cleaners by their own.
Stupid move either way.
The CHIPS Act is meant to be the compensation. Take away customers there, add customers here.
Barring a change in US policy (which of course is not implausible), there will be more of the same. This is an effort to shift the rest of the highest end of semiconductor manufacturing to US-friendly countries and starve China of the next round of process improvements. And it's not just ASML. Read the section of Conway's book on silicon; there are a bunch of single-source suppliers for the necessary equipment (Linton Crystal, Veeco, Tokyo Electron, etc). There's only one known source of raw silicon of sufficient purity, and it's in the US, and there are only two companies mining it. There's only one firm that can make the wafers for the highest nodes; it's Japanese, and it manufactures in the US.
China is certainly looking to duplicate all of that. It'd be a huge error on the part of the Chinese government to do otherwise. But this war is much, much more complicated than "the US government is bullying ASML", and reductive comments to that effect are just naïve and foolish.
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