The Dutch government is planning to restrict ASML’s ability to repair and maintain its lithography machines in China, which are critical for semiconductor manufacturing.

According to a report from Bloomberg, Prime Minister Dick Schoof is unlikely to renew certain licenses that allow ASML to service equipment and replace parts where needed.

The licenses, which mostly relate to the company’s advanced deep ultraviolet lithography (DUV) machines, are due to expire at the end of the year.

ASML is the sole global supplier of extreme ultraviolet lithography (EUV) photolithography machines that are needed to make the most advanced chips. The decision would, therefore, mean chipmakers in China, such as SMIC and Huawei, would no longer be able to produce cutting-edge semiconductors.

It’s believed the move follows pressure from the US government, which is engaged in an ongoing trade war with China to restrict the country’s access to advanced semiconductor equipment and technology. In late March 2024, the US government announced it would start asking its allies to stop their domestic semiconductor companies from servicing chipmaking tools for Chinese customers.

This is not the first time the Dutch government has succumbed to pressure from the US, having previously revoked an export license to stop the shipment of two older lithography machines to Chinese customers.

ASML has been operating in China for around 30 years and, in 2023, Chinese companies bought 46 percent of ASML's lithography systems sold in the third quarter of 2023, generating around $3.7bn in revenue between July and November of that year.

During an interview with Dutch radio station BNR on July 6, ASML’s former CEO Peter Wennink said the current trade war between the US and China is ideologically driven rather than based on facts, arguing that the company has obligations to its staff and customers in the region.