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ASML CEO Says World Needs Legacy China’s Chips

Chip buyers, including the German auto industry, are nowadays demanding older-generation computer microcircuits, in which chip manufacturers in China are actively investing.

ASML CEO Says World Needs Legacy China's Chips

The mentioned statement was made by the Chief Executive Officer of ASML Christophe Fouquet during a conversation with media representatives. The specified company is based in the Netherlands and specializes in the production of equipment necessary for the manufacturing of chips.

Christophe Fouquet took over ASML in April. Speaking to the media, the CEO of Europe’s largest technology company said the European Commission has begun asking firms about their views on Chinese manufacturers’ investments in so-called legacy chips. It is worth noting that microcircuits of the specified conditional category are an important source of revenue for ASML.

Christophe Fouquet says that the automotive industry, including the German one, needs many more chips, which are produced in a manufacturing process based on simple technologies that have long been known.

Chinese companies, faced with restrictions on access to advanced technological solutions, have begun to expand their capacity to make legacy microcircuits. The corresponding restrictions were set by Washington and supported by some of its allies, including Amsterdam. Christophe Fouquet says China’s efforts to expand chip-making capacity are raising concerns in Europe and the United States about the long-term potential for oversupply.

ASML CEO says that global demand for microcircuits, produced using long-known technologies, is on a trajectory of sharp growth. At the same time, he noted that the production of relevant products is not very profitable. ASNL CEO noted that Western companies do not invest enough funds in this segment of the chip industry. Christophe Fouquet said that Europe cannot cover even half of its needs for microcircuits produced using long-known technologies.

Chinese chipmakers will increase their capacity by 14% next year, according to preliminary estimates from industry group SEMI. This degree of intensity is more than twice the rate of a similar process characteristic of the rest of the world. In terms of specific quantitative indicators, the projected capacity of Chinese chip manufacturers in 2025 will be 10.1 million wafers per month. This figure is equivalent to about a third of total world production.

Christophe Fouquet says that if someone, for certain reasons, wants to slow down the dynamic of Chinese chip manufacturers, then alternatives are needed. In this context, he said that there is no point in preventing the making of products that consumers need.

It is worth noting that Christophe Fouquet, as head of ASML, carries out some kind of political work. Currently, the United States is actively promoting and, in a practical sense, progressively implementing a strategy to limit the technological potential of China. Certain bans on the supply of chips to the Asian country have already come into force, but policymakers in Washington are convinced that the corresponding measures against Beijing should be scaled up and affect a wider range of products. Against the backdrop of restrictive measures on the part of the United States, which were joined, among other things, by the leadership of the Netherlands, ASML no longer exports machines for the manufacturing of expensive specialized microcircuits to China. Christophe Fouquet is not a supporter of restrictive policies. In this context, he focuses on the fact that Europe needs microcircuits, which are made in China. Single statements or efforts are unlikely to change the global process, which has signs of a geopolitical fundamental tendency, but the position declared by Christophe Fouquet regarding restrictive measures on the part of Washington is indicative in the context of the high level of interest of Western business in cooperation with Beijing. For example, last year media reported that Nvidia was developing special chips for the Chinese market to comply with US export controls and continue to commercially interact with the Asian country.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.