RetroFedASML shares plunge following reports of Chinese breakthrough in chip manufacturing. China has begun producing advanced chip manufacturing equipment, the very same that made ASML a major player
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Play stupid games and win stupid prizes.
Preventing one of your biggest customers (China) from getting the equipment they need forces them to make it themselves.
Now China can make their own DUV lithography machines of similar quality to the ones they can get from ASML.
And obviously it won’t stop there, China will continue to improve, and probably in a few years compete with ASML on the high end EUV equipment too.
Worth mentioning that this export restriction was only enforced because of continuous pressure from the US.
maybe we shouldn’t allow USA to decide European foreign policy? Just a thought.
That and the NVIDIA ban on China both backfired spectacularly
Absolutely, although China can’t match Nvidia yet, they can now make chips that are good enough for 90% of the tasks.
Nvidia can no longer sell their second rate products developed specially for China anymore either.
Politicians, and even corporate C-suite, often confuse “cheaper to buy from the incumbent” with “incumbent has impossible-to-replicate technology,” completely ignoring that it’s way easier to invent something the second time.
Technology might have been a barrier in 1960’s China, but they’re a peer nation today.
Of course if China manages to spin major fab capacity of bleeding edge nodes off of this in the next few years they’ll have no use for US chips.
Couple that with the fabs being built in the US currently and Taiwan is losing a lot of strategic leverage…
China is already making really good chips, even in old and “outdated” fabs. Because they came up with techniques for how to squeeze more resolution out of those machines than what was thought possible. So if their DUV technology actually works, then I’m sure their fabs will make good chips.
The Dutch government forced China to make these machines themselves by enforcing the embargo demanded by the US.
Now, China does exactly that. Then they scale up until they have strategic overproduction. Then the surplus gets thrown on the global market for cheap. Then ASML dies.
Goal: Prevent China from getting the tech.
Actual effect: The west becomes dependent on China for the tech.
As usual folks are blind to second order effects.
Accurate. The West was in the Denial stage of Grief back then, believing that China could only copy, not innovate. We’re already at Bargaining now.
Yay! Lower prices and an accelerated pop of the data center AI.
ASML “plunged” right along with the entire tech sector…….
To be fair: Yes, we do have that pipeline. But we do not have long-term strategic government funding of strategically important industries - especially not Dutch ones. China tries to plan a century ahead (and seems to actually be able to plan a few decades ahead). No western government seems to plan further ahead than an election cycle.
A centralized guaranteed stable government has different opportunities to plan ahead than a government which has to primarily care about being reelected. Our simulation of democracy isn’t free. The massive election theater and lobbying comes with huge price tags (which are mostly invisible to the public until no one can afford to have kids anymore).
We make them, then force them to flee fascism. We’ve had a massive brain drain since dipshit donnie took office.
– americans
ASML is a victim of US sanctions and Dutch/EU spinelessness. China would never had bothered to pursue lithography as serious as it did if US wasn’t continuously trying to stop China on every technological front. The Europeans let US do it in the hope and under the promise that China would never succeed.
I think China would have pursued it regardless, they just might have relied more heavily on European tech then they do now and thus would have delayed their home grown tech. Or if Europe played their cards right would have resulted in a better trade alliance with China and have benefitted both economic areas by exchanging tech advances sidelining the US. This last one might be a bit to much of a utopia though
it’s really inefficient to pursue such a massive research endeavor if ASML was just normally open for business. To do all that work was only justified by it opening a chance in domestic semiconductor production which is the real price for China. Now they are probably also wanting to compete in DUV machines in the future, to recoup the development costs, even if the real price is the self-sufficiency that they bring.
Some of it translated
Huh? I thought that the current generation of fabs were embargoed via sanctions by the us. At least for “bad” actors.
When the us intelligence community announced that China had gotten hold of a recent machine asml vehemently denied that they ever sold one directly or that they could be moved without asml noticing. Not to speak of the know how needed to get it back up and running. I brlive them In these points.
This translation goes kinda against that. Anybody know how the situation above played out?
It talks about DUV (deep ultra violet), last generation, not EUV (extreme ultra violet). So China is now a competitor on part of ASML’s market where they held about 95% market share, not on their 100% top of the line models that can go even more detailed.
Since ASML DUV line has been around longer they worked on increasing stability and performance, so likely they won’t be outperformed globally, yet. But China has extra incentive not to buy Dutch since they won’t sell them EUV. This will have a noticable effect on their revenue, but it’s speculation as to how much revenue they will loose unless China mandates their own product.
Also, ASML is increasing DUV capabilities beyond the laser input size + lenses with a bubble of water which changes the refractory index which lays on top of the wafer, no idea if that is in the Chinese products. If it isn’t we are basically talking about the 4th gen machine. It’s DUV, DUV + water, EUV (needing mirrors since lenses now absorb this light), EUV with increased height requirements for the clean rooms).
The fabs in use for the latest chips are typically 1 to 2 generations behind, because it’s expensive and takes a long time to get a new fab in place (these are extremely sensitive machines). Even if China could produce the exact fabs most in use today (which is already a little unlikely), ASML themselves are 2 gens ahead.
This will likely reduce prices on older gen chips though, and those were no slumps either.
If the sheer incompetence would stay consistent, US companies would start to buy chinese vcards and maybe even their inventory of underpowered nvidias. The American way is to play bait and switch without even baiting. It is to poke own eyes out to win at poker.
At this point I’ve accepted that the USA has ceded(purposefully?) its top spot on the world stage to China.
ASML is Dutch.
We were ordered by the US to cede our top spot.
After the plunge, it’s still +30% YTD, big deal
Go China! You can do it! Make shit affordable again.
Until they steal the IP of whatever company you work for …
based. the future is chinese
People act like these series of events have pushed humanity forward. We are seeing the US, EU, and China all try to do as well as they were during the era of freer trade. Unfortunately for both China and the US the primary reasons for them pushing for this less then world is mostly desire to have their respective state dominate more people’s then they can now.
I think for China the drive is more in the sense of trying to escape poverty by industrializing, and securing their supply chains to avoid another century of humiliation.
As well for sure. Just the US also has factions trying to secure well paying union jobs as part of this. Both factions have had a voice towards protectionism but it wasn’t till it was war hawks trying to secure authoritarian (aka fascist) powers made moves did the needle really move.
Hell yeah! To hell with that chip monopoly. National security my ass!