Sou Hu Cai Jing·2025-10-21 08:04Core Viewpoint - ASML's CEO expressed concerns over China's potential abandonment of its lithography machines and the implementation of rare earth countermeasures, highlighting the intense technological competition between the US and China [1] Group 1: ASML's Concerns - ASML's anxiety stems from recent US regulations that expanded sanctions to subsidiaries controlled by Chinese companies, leading to the freezing of assets of a Chinese semiconductor firm [3] - The Dutch government, feeling supported by the US, took aggressive actions against Chinese investments, underestimating China's ability to retaliate swiftly and effectively [3] Group 2: Impact of Rare Earth Regulations - China announced strict export controls on five types of medium and heavy rare earths, affecting the entire supply chain from mining to manufacturing [3] - ASML's lithography machines require over 10 kilograms of rare earth magnets, with over 90% of these materials sourced from China, leading to a potential production drop of 15-20 machines per month and a loss of up to €3.2 billion annually [5] Group 3: China's Advancements in Lithography Technology - By Q3 2025, China is projected to become ASML's largest customer, with a 42% share of equipment deliveries, despite being blocked from acquiring advanced EUV lithography machines [7] - Chinese companies are making significant strides in developing their own lithography technologies, with local equipment coverage expected to rise from 15% in 2022 to 35% by 2025 [7] Group 4: ASML's Historical Context and Challenges - ASML has been a key player in US-led technology restrictions against China, facing a dilemma between adhering to US regulations and maintaining access to the Chinese market [12] - The company's sales to China peaked at 49% in early 2024 but are expected to drop to 25% by 2025 due to ongoing sanctions, resulting in a projected revenue loss of €2 billion [12] Group 5: Future Dynamics and Industry Implications - The Dutch government has shown signs of softening its stance, seeking negotiations with China, while the automotive industry in Germany expresses significant concern over reliance on Chinese rare earths [14] - The ongoing semiconductor industry struggle reflects a broader battle for control over supply chains, emphasizing the need for cooperation rather than confrontation to ensure sustainable development [15]