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ASML extends supply deal with China’s SMIC

China accounted for 17% of ASML sales in 2020

SMIC logo (SMIC website)

SMIC logo (SMIC website)

TAIPEI (Taiwan News) — Dutch chipmaking equipment manufacturer ASML Holding N.V..has extended its deal with China’s Semiconductor Manufacturing International Corp (SMIC) until the end of this year.

SMIC made a disclosure under Hong Kong listing rules on Wednesday (March 3) of a volume purchase agreement in which it had already bought US$1.2 billion worth of equipment from the Dutch company, Reuters reported. According to a press release, ASML said it entered into the SMIC deal in 2018, which was originally set to expire at the end of 2020, but that the two companies in February agreed to extend the agreement until the end of this year.

Last December, the U.S. Department of Commerce added SMIC, which relies heavily on equipment from American companies, to the Entity List over its alleged links to the Chinese military — an accusation the company has denied. The designation requires U.S. exporters to apply for a special license to export to SMIC, China’s largest chipmaker.

ASML is the world’s leading supplier of lithography equipment for the manufacturing of semiconductors. It makes an extreme ultraviolet lithography (EUV) machine that is vital to the manufacturing of advanced chips.

The Trump administration pressured Dutch officials to halt the sale of an EUV machine to SMIC in 2019, which led Dutch authorities to turn down a license renewal request needed to ship the chipmaking tool, according to Reuters. As of late February, Dutch officials had not approved a license to ship the EUV machine to China, per the report.

ASML clarified in its statement that the agreement with SMIC involved older deep ultraviolet lithography (DUV) machines. ASML recorded 14 billion euros (NT$470 billion) in sales in 2020, of which China accounted for 17 percent.

Updated : 2021-04-20 03:24 GMT+08:00