Semiconductor equipment firm ASML is seeing a negative effect on US' containment policy towards China. ASML CEO Peter Wennink shared his views on the China issue, as well as export restrictions and protectionism that the company is facing in the Nieuwsuur TV program broadcast on the evening of September 4.
Wennink has expressed his concerns on export restrictions and the economic ties between the Netherlands and China on various occasions.
Wennink emphasized during the interview that isolating China completely through export controls is not a viable approach. This indirectly suggests that Huawei's self-developed 5G SoC used in Mate 60 Pro and manufactured by SMIC's N+2 7nm processing node should not come as a surprise to anyone, as these restrictions are, in fact, pushing China to redouble its innovation efforts.
He stated that if Europe and the United States are unwilling to share technology, China will do it on its own. With a population of 1.4 billion, many of whom are highly intelligent, they are coming up with solutions that Western businesses have not yet considered. The restrictive policies of Western governments are compelling China to become highly innovative.
In the interview, Wennink delved into critical issues surrounding the ongoing "chip war" between China and the United States, emphasizing its global implications and the role of the Netherlands in this complex scenario. Additionally, Wennink highlighted the challenges and opportunities the Dutch business model faces amid shifting global dynamics.
Wennink explained that controlling advanced chip manufacturing provides considerable power and economic advantage, and currently, 80% of these chips are produced in Taiwan, South Korea, and China. Both the US and the EU aim to reduce their dependency on Asian chip manufacturers and invest heavily in their domestic chip industries. Simultaneously, the US seeks to curtail China's access to chip technology, fearing its potential military applications.
Notably, ASML, located in Brabant, plays a pivotal role in this chip war by manufacturing machines capable of producing the world's most advanced chips. The United States has pressured the Netherlands to limit ASML's exports to China, a trend that began with the denial of an export license in 2019. The US now demands even stricter restrictions, prompting Prime Minister Rutte to engage in negotiations with Washington.
However, Wennink cautioned against hasty conclusions, as China is expected to devise alternative means to acquire the necessary technology, potentially sparking a new arms race with global ramifications.
The Dutch Business Model and Global Transitions
While discussing the Dutch business model and the challenges it faces, Wennink underscored the need for innovation and forward-thinking. He argued that the Netherlands must stay relevant and not become overly dependent on external innovations that they cannot negotiate with. The world is undergoing major transitions, such as digitization and the energy transition, which require substantial innovation to address effectively.
Wennink expressed concern about complacency in Europe, emphasizing that countries like the US, China, Japan, South Korea, and Taiwan have clear visions for their futures and are actively investing in innovation. Europe, Wennink warned, must adapt to these global transitions to remain competitive.
He acknowledged cultural differences between Western societies and countries like China but stressed that this should not deter Europe from staying at the forefront of innovation. Instead, it should motivate Europeans to create a responsible society, with a focus on ensuring a decent standard of living, access to education and healthcare, and overall safety for all citizens.
Wennink suggested that investing in education and research, along with creating a more efficient system for labor migration, could help address short-term challenges while pursuing long-term solutions to talent shortages.
In conclusion, ASML CEO Peter Wennink's insights shed light on the complex dynamics of the chip war, China's role in the global semiconductor industry, and the challenges and opportunities facing the Dutch business model in a rapidly changing world. These issues demand a balance between global cooperation and national interests, as well as a commitment to fostering innovation and societal responsibility.
