ASML delays EUV machine shipment to SMIC

Author: EIS Release Date: Nov 7, 2019

ASML has held up the delivery of an EUV machine to SMIC, according to the Nikkei.

SMIC put in the order for the machine in April 2018 and delivery was scheduled for the end of this year with installation by mid-2020.

ASML currently gets 16% of its sales from the US and 19% from China and the China market is growing faster than the US market, so it faces a conflict of interests.

However the delay won’t put ASML under competitive pressure for EUV machines because it has a monopoly on the supply of the machines.

A fifth of the components ASML uses to make its machines come from its Connecticut plant which could make it subject to US jurisdiction in export restrictions.

It is unclear whether the delay in supplying the EUV machines was a result of US pressure or a delay in the issuing of an export licence by the Dutch government.

EUV machines come under the Wassenaar Agreement which limits sales of technology to certain countries. ASML was thought to have a licence to export the machines to China.

However, ASML is quoted as saying: “A request for the renewal/extension of the export license for EUV to China is currently being processed by the Dutch government. Pending this process we cannot ship EUV to China.”

The fact that SMIC, which made profits of $134 million last year, has ordered an EUV machine which, with associated contracts, costs around $150 million, suggests that the China government might be supporting SMIC in the purchase.