Europe is pushing back on Washington’s chip war

The Dutch trade minister traveled to Washington this week to oppose the MATCH Act, a U.S. bill that would block Chinese chipmakers from accessing more Western semiconductor equipment, a move officials say would hit ASML, Europe’s most valuable company, especially hard. [1] Trade Minister Sjoerd Sjoerdsma met with Commerce Secretary Howard Lutnick and members of Congress to outline the Netherlands’ concerns. “It’s exceptional that I’m coming here to broadly outline our concerns to Congress,” Sjoerdsma said. “The stakes for the Netherlands may be very high.” [1] The bill, introduced in April, has not yet faced a full House or Senate vote and would likely need to be folded into a larger package to pass. [1] ASML, headquartered in Veldhoven, Netherlands, is the only manufacturer of the sophisticated lithography machines required to produce cutting-edge AI chips. [1][7] China currently accounts for 19% of ASML’s net system sales. [1] The MATCH Act would extend curbs to ASML’s deep ultraviolet immersion machines, on top of the existing ban on its most advanced extreme ultraviolet tools reaching China. [1] ASML CEO Christophe Fouquet has noted that what China can currently buy are older-generation deep ultraviolet tools — gear first shipped about a decade ago — the same machines the MATCH Act would now relegate off limits. [1] The Dutch pushback unfolds amid a broader U.S. effort to counter China’s semiconductor ambitions. The 2022 CHIPS and Science Act authorized roughly $280 billion to boost domestic chip research and manufacturing, with $39 billion in subsidies for fabrication on U.S. soil and a 25% investment tax credit for manufacturing equipment, aiming to strengthen supply-chain resilience and counter China. [4] The geopolitical contest over advanced chips has been described as an “AI Cold War,” in which the United States and China compete for dominance in artificial intelligence technology powered by increasingly advanced semiconductors. [5] Taiwan Semiconductor Manufacturing Company, which holds approximately 70% of the global semiconductor foundry market and serves as the main supplier for Nvidia, Apple, and Qualcomm, has been identified as a supply-chain bottleneck, raising concerns that a disruption could cause another worldwide chip shortage. [6] The previous global chip shortage, which lasted from 2020 to 2023, affected more than 169 industries, led to major price increases, and extended semiconductor lead times to 22.2 weeks by April 2021. [2]