Europe is pushing back on Washington’s chip war

In a significant diplomatic move, Dutch Trade Minister Sjoerd Sjoerdsma traveled to Washington this week for discussions with Commerce Secretary Howard Lutnick and various congressional members. The focus of these talks was the contentious MATCH Act, a proposed legislation aimed at restricting Chinese semiconductor manufacturers from accessing essential Western technology, a measure that could severely impact ASML. ASML, headquartered in the Netherlands, stands as Europe's most valuable company and the sole producer of advanced lithography machines critical for the production of leading-edge AI chips. Following the meetings, Sjoerdsma expressed to Bloomberg the gravity of the situation, stating, "It’s exceptional that I’m coming here to broadly outline our concerns to Congress. The stakes for the Netherlands may be very high." The financial implications are notable, as China represents 19% of ASML’s net system sales. The MATCH Act intends to impose stricter regulations than current measures, extending restrictions to ASML’s deep ultraviolet immersion machines, in addition to the longstanding prohibition against its most advanced extreme ultraviolet (EUV) tools being sold to China. ASML CEO Christophe Fouquet highlighted in May that the Chinese market currently only has access to older deep ultraviolet tools, which the new bill would also put out of reach. Introduced in April, the MATCH Act has yet to undergo a full vote in either the House or Senate. Analysts from Bloomberg suggest that for the bill to advance, it may need to be incorporated into a more extensive legislative package.