You are here: Home » International » News » Companies
Business Standard

ASML extends sales deal with Chinese chipmaker SMIC to end of 2021

ASML said the agreement began in 2018 and was slated to expire at the end of 2020, but the two companies agreed in February to extend the deal to the end of this year

China | chinese chipmakers | ASML


Chipmaking, Chips, Chip makers

By Stephen Nellis

(Reuters) - Holding NV has extended a deal to sell chip manufacturing equipment to Semiconductor Manufacturing Corp, China's largest chipmaker, until the end of this year, the Dutch company said in a statement on Wednesday.

made the statement after SMIC on Wednesday disclosed a volume purchase agreement under which it has already spent $1.2 billion with the toolmaker. In a clarifying statement issued several hours later, said the agreement began in 2018 and was slated to expire at the end of 2020, but the two agreed in February to extend the deal to the end of this year.

In December, SMIC was one of dozens of firms put on a U.S. blacklist that required American semiconductor manufacturing equipment firms such as Applied Materials Inc and Lam Research Corp to obtain a license before exporting products to the chipmaker.

The U.S. Commerce Department said the action against SMIC stemmed from China's efforts to harness civilian technologies for military purposes and evidence of activities between SMIC and Chinese military industrial of concern. The rules would still allow the shipment of tools for making less advanced chips.

ASML, which is based in the Netherlands and is the world's largest supplier of lithography equipment for making chips, produces a critical tool required to manufacture advanced chips: an extreme ultraviolet lithography, or EUV, machine.

In 2019, the Trump administration pressed Dutch officials to cancel a sale of an EUV machine to SMIC. At that time, Dutch officials declined to renew a license needed to ship the tool. Dutch officials had not approved a license to ship an EUV tool to as of late February, according to government records.

In its statement on Wednesday, ASML said the volume purchase deal with SMIC related to an older technology called deep ultraviolet lithography, or DUV.

In January, ASML Chief Executive Peter Wennik said the company could see "significant upside" selling older chipmaking technology to if allowed by government officials to do so. accounted for 17% of ASML's 14 billion euros in 2020 sales.

On Monday, the U.S. National Security Commission on Artificial Intelligence, or NSCAI, recommended that the United States coordinate with the Netherlands and Japan to deny export licenses to China for key chipmaking equipment.

"This (sale) is a slap in the face to the NSCAI recommendations and shows how big the gap with allies is on these issue," a U.S. semiconductor executive said on condition of anonymity.


(Reporting by Stephen Nellis in San Francisco and Toby Sterling in Amsterdam; Editing by Paul Simao and Jonathan Oatis)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, March 03 2021. 22:32 IST