ASML Holding(US:ASML) Sou Hu Cai Jing·2025-10-14 02:08Core Viewpoint - The Chinese Ministry of Commerce has implemented strict export controls on rare earths and related technologies, significantly impacting global supply chains, particularly for ASML, the only company capable of producing advanced EUV lithography machines, which rely heavily on Chinese rare earth materials [1][3][5]. Group 1: New Regulations - The new regulations require any product containing more than 0.1% Chinese rare earth components to obtain approval from China before re-exporting [1][3]. - The regulations encompass the entire industry chain, including mining, smelting, metal refining, and magnet manufacturing, making it difficult for companies to bypass controls through third-party countries [3][5]. Group 2: Impact on ASML - ASML's EUV lithography machines depend on rare earth elements like neodymium, dysprosium, and terbium, with over 10,000 parts in each machine [5]. - The company may face shipment delays of up to 12 weeks due to the new approval requirements for all equipment containing Chinese rare earths [8]. Group 3: Broader Industry Effects - The new regulations have immediate repercussions for the global semiconductor industry, affecting major players like TSMC, Samsung, and Intel, all of which rely on ASML's machines for high-end chip production [7]. - Samsung's attempt to replace neodymium-iron-boron magnets with samarium-cobalt magnets has resulted in a 40% cost increase, while Intel's Arizona factory has only 90 days of rare earth polishing material inventory [9]. Group 4: Geopolitical Context - The export controls reflect an escalation in the tech rivalry between the U.S. and China, mirroring the U.S. "foreign direct product rule" by enforcing technology traceability [11]. - The crisis highlights the vulnerability of the Western semiconductor industry, as the U.S. lacks a complete processing supply chain despite having rare earth resources [11]. Group 5: Market Reactions - The market has reacted sharply, with dysprosium oxide prices soaring by 30% within 48 hours, and the stock prices of Chinese companies like Northern Rare Earth have surged [13]. - Morgan Stanley predicts that if the controls persist, prices for smartphones and PCs could rise by 15% to 20% by 2026 [13]. Group 6: ASML's Strategic Choices - ASML's current predicament is linked to its previous decisions to halt exports to China under U.S. pressure, resulting in a significant revenue drop from the Chinese market, which once accounted for 29% of its income [15]. - The new rare earth regulations not only disrupt ASML's supply chain but also create uncertainty for its global customers, reshaping the dynamics of global tech power [15].