Yahoo Finance Netherlands restricts chipmaking exports to China
Yahoo Finance Live anchors discuss the latest trade tensions between the U.S., Europe, and China when it comes to chipmaking.
Video transcript
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RACHELLE AKUFFO: Turning now to some global headlines. The Netherlands set to expand its curb on the export of chipmaking equipment to China, adding to US-led measures meant to throttle China's semiconductor capability. Now such restrictions would bring the Dutch in line with US policy, which does aim to check China's control of the semiconductor market over worries of not just dependence, but also surveillance.
And we know that this is an issue where, when you think about the global supply chain of semis, a lot of people are saying yes. The minerals are located in China, but if you don't have the equipment coming from the Netherlands, and if you don't have that equipment that's then supplied by the US, what does this actually mean for the ecosystem, Akiko?
AKIKO FUJITA: Yeah. And, Rachelle, we're talking specifically about one company that is at the epicenter of this chip turmoil. It's ASML, which makes the machine needed by chipmakers to print small designs onto microchips. They supply every major chipmaker from Taiwan Semiconductor to Samsung and Intel. And they do provide equipment that is among the most advanced chipmaking quality here.
And it's interesting to see here, Rochelle, how the US is essentially forcing-- if you want to say the world, but especially US allies, to pick a side. Because when you think back to what happened in October, the most stringent export controls that were put in place by this administration, specifically preventing American chipmakers, or more-- I mean, all but preventing American chipmakers from providing to China.
They could apply for a license, although there's questions about whether, in fact, that would be granted or how lenient that would be. And then, of course, it prevented US citizens from being able to work on these programs that would supply to China as well. So ASML is currently wrapped up in that already. They had advised back in the fall to call on their US citizens or those who are working within the company to stop working on that because they didn't want to be in violation.
But now you've got the Netherlands essentially saying, OK, we're kind of going to go along with this because the concern with the US is, even if the US stops American companies that provide chipmaking equipment-- we're talking about places like Applied Materials, there are other providers who can provide to China, and that necessarily wouldn't cripple their ability to make the most advanced chips.
The other fear on this is that, let's say they don't necessarily comply, well, then they take market share away from American companies. | talk so much about semiconductors, but so much of this really is about the diplomatic negotiations that are happening between these countries who are, as you point out, Rochelle, really part of a global footprint that allows us to get the chips that are not just in our devices, but also in military equipment. I mean, semiconductors have really, really come to be at the very center of a lot of these geopolitical tensions.
RACHELLE AKUFFO: And you raise a good point. Because when you think of everyone trying to have sort of their independence when it comes to the chip industry, it goes through a supply chain spanning multiple countries. So it's not as easy as saying, we want to just have our own chips. There's a lot of pieces in place.
And when you factor in geopolitical issues with this sort of race for the high tech future, it makes for a very interesting stew here. And it also means there's a lot of levers that, if you're the one supplying the minerals or supplying the equipment, that you get to have a bit of leverage here. So an interesting dynamic that's emerging.
