ASML-Backed University Finds Itself Caught In The Middle Of US-China Chips War

In the escalating U.S.-China chip war, the Eindhoven University of Technology, a significant talent source for ASML Holding NV ASML, finds itself under increasing scrutiny from the U.S. The Netherlands, a primary source of machinery and expertise for advanced semiconductors, is under pressure from Washington to curb Beijing’s semiconductor production capabilities.

What Happened: The Eindhoven University of Technology, located near ASML’s global headquarters, is facing questions from the U.S. due to its large number of Chinese students, Bloomberg reported on Tuesday. The Dutch government finds itself caught between its U.S. ally and a major export market in China amid this escalating battle over the global chip supply chain.

Earlier this year, under U.S. pressure, The Hague imposed restrictions on exports of ASML’s immersion DUV lithography machines, a key machinery category. Before the ban, U.S. officials requested ASML to cancel some scheduled shipments to Chinese customers.

ASML’s significant investment in the Eindhoven University of Technology to train future employees is now under threat. In May, ASML committed €80 million ($87 million) to the university for the training of PhD students and upgrading the school's clean room building, a critical environment for chip study.

As China advances in its domestic chip technology, concerns over espionage are growing. In 2023, ASML accused a former China-based employee of stealing confidential information, leading to an internal investigation and tightened security controls. Amid these developments, U.S. officials are urging the Netherlands to prevent ASML from servicing and repairing sensitive chip-making equipment purchased by Chinese clients before sales restrictions were implemented.

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Why It Matters: China’s efforts to become self-reliant in chip manufacturing have intensified the global chip race. Securing a steady flow of chips has become a geopolitical strategy worldwide, leading to sizable investments in domestic building capabilities.

The Dutch government drafted legislation in 2023 to bar Chinese students from university programs involving sensitive technologies, including semiconductors and defense. However, the bill has yet to be voted on. This comes as Chinese President Xi Jinping urges China to boost its innovation capabilities in light of the continuing semiconductor conflict with the U.S.

Meanwhile, ASML is poised to witness a surge in new orders, driven by the escalating demand for AI chips. This development is likely to be announced on Wednesday when the company's new CEO presents the second-quarter results.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari