ASML Ready to Build Chip Manufacturing Equipment Repair Center in China Despite Sanctions

Previous US officials have tried to push the Netherlands to join efforts to restrict Chinese companies’ access to chip-making equipment, but ASML plans to open a repair and maintenance center in China this year to service its equipment used by local customers to make chips.

Image Source: ASML

ASML’s annual report, as noted by the South China Morning Post, openly mentions the Dutch company’s intentions to open a new service center in the Chinese capital this year. Until now, it was believed that, at the insistence of the American side, the Dutch authorities could limit ASML’s ability not only to supply new chip manufacturing equipment to China, but also to service the existing one, including the business trips of specialists.

At the same time, by the end of 2024, ASML’s revenue in the Chinese market reached 36.1% of the total, surpassing Taiwan for the first time and making this geographic area key for the Dutch equipment supplier. In fact, Taiwan was limited to only a 15.4% share and €4.3 billion versus €10.2 billion in China. As ASML notes in its annual report, the significant increase in revenue in the Chinese market is due to the large portfolio of orders formed in previous years. As soon as they are fulfilled, the revenue flow will normalize.

Globally, only the memory production segment demonstrated high demand dynamics for ASML equipment, as noted in the company’s documentation. Sanctions from the US and its allies will inevitably lead to a decrease in the company’s revenue in the Chinese market. In October, it announced that China’s share in the structure of total revenue this year would decrease to 20%. Apparently, the service center in Beijing will focus on servicing already imported equipment and will, to one degree or another, comply with the sanctions restrictions.