ASML Holding NV, the sole producer of the most advanced machines used in semiconductor manufacturing, said geopolitical tensions are harming innovation a day after US President Donald Trump levied massive tariffs that promise to disrupt trade flows across the entire world.
“Our industry has been built basically on the ability of people to work together, to innovate together,” ASML chief executive officer Christophe Fouquet said in a recorded message at a Thursday industry event in the Netherlands.
Export controls and increasing geopolitical tensions challenge that collaboration, he said, without specifically addressing the new US tariffs.
Photo: Reuters
Tech executives in the EU, which is set to be hit with a 20 percent rate, are still working out the impact to their businesses and supply chains.
ASML is in a unique position, making the most advanced machines used in chip production, known as extreme ultraviolet (EUV) lithography tools. Without ASML’s machines, it becomes impossible for semiconductor companies to produce the chips necessary for high-end smartphones and computers.
While the tariffs announced on Wednesday exclude semiconductors, they make no mention of chip manufacturing tools.
An ASML spokeswoman declined to comment on how those tariffs could affect the company. The near-term direct impacts could be limited, according to Thornburg Investment Management.
Last year, about 16 percent of ASML’s net sales came from customer facilities in the US, according to the company’s annual report.
Still, several key ASML customers — Intel Corp, Taiwan Semiconductor Manufacturing Corp (台積電) and Samsung Electronics Co, among others — are ramping up their US operations, with plans to build a slew of new chipmaking facilities in the coming years as Washington works to revitalize domestic semiconductor production.
One key incentive for that buildout is a 25 percent investment tax credit, part of the 2022 CHIPS and Science Act, that could be used to offset purchases of expensive chip manufacturing tools.
Trump’s so-called reciprocal tariffs hit allies and adversaries alike, with a reach that far exceeds any trade actions from his first term. That includes the Netherlands and several other key exporters of chip manufacturing equipment, such as Japan, which now faces a 24 percent tariff, and South Korea, against which the US levied 26 percent import duties, according to the annex accompanying Trump’s executive order.
The EU is preparing a package of retaliatory measures, Dutch Foreign Trade Minister Reinette Klever said, and individual countries have the opportunity to provide input.
“I met with the US trade representative in Washington a few weeks ago and there I stressed the importance of reciprocal trade and that remains our commitment in the future,” Klever said, declining to comment on whether the Netherlands would seek exemptions for ASML.
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