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SAN FRANCISCO – President Biden and a lot of lawmakers in Washington are worried about computer chips and what China wants to do with them. But a huge machine sold by a Dutch company has become a key tool for policymakers. It shows that no country can build a supply chain for semiconductor technology that is completely self-sufficient.
ASML Holding, which is based in Veldhoven, makes the machine. Its system uses a different kind of light to define ultrasmall circuitry on chips, making the small pieces of silicon more powerful. The tool took decades to make, and high-volume production didn’t start until 2017. It costs more than $150 million. It takes 40 shipping containers, 20 trucks, and three Boeing 747s to get it to customers.
Most people agree that a complicated machine is needed to make the most advanced chips, which has geopolitical implications. The Trump administration was able to convince the Dutch government to stop sending this kind of machine to China in 2019, and the Biden administration hasn’t shown any sign of changing this position.
Manufacturers can’t make cutting-edge chips without the system, and “it is only made by the Dutch company ASML,” said Will Hunt, a research analyst at Georgetown University’s Center for Security and Emerging Technology. The center has found that it would take China at least a decade to build its own similar equipment. “That is frustrating from China’s point of view.”
ASML’s machine has become a bottleneck in the supply chain for chips, which are the brains of computers and other digital devices. The fact that the tool was made on three continents, with help and parts from Japan, the US, and Germany, is a reminder of how global the semiconductor supply chain is. It’s a wake-up call for any country that thinks it can get ahead in semiconductors on its own.
This includes both China and the United States, where plans to spend more than $50 billion to stop relying on foreign chip manufacturers are being discussed in Congress. Many parts of the federal government, especially the Pentagon, have been worried about how much the U.S. depends on Taiwan’s biggest chip maker and how close the island is to China.
In a study done this spring by Boston Consulting Group and the Semiconductor Industry Association, it was estimated that making a self-sufficient chip supply chain would cost at least $1 trillion and sharply raise the prices of chips and products made with them.
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Willy Shih, a management professor at Harvard Business School who studies supply chains, said that goal is “completely unrealistic” for anyone. “ASML’s technology is a great example of why you can trade with people all over the world.”
The situation shows how important ASML is. The company used to be unknown, but its market value is now more than $285 billion. C.J. Muse, an analyst at Evercore ISI, called it “the most important company you’ve never heard of.”
ASML was founded in 1984 by the electronics giant Philips and another toolmaker, Advanced Semiconductor Materials International. It is now a separate company and by far the biggest provider of lithography-based equipment for making chips.
Using lithography, manufacturers project chip circuitry patterns onto silicon wafers over and over again. The more tiny transistors and other parts that can be added to a single chip, the more powerful it becomes and the more data it can store. Moore’s Law, which is named for Gordon Moore, one of the people who started the chip company Intel, describes how quickly things are getting smaller.
In 1997, ASML started to look into making the switch to using EUV light. This kind of light has very short wavelengths, so it can be used to make circuits that are much smaller than what is possible with regular lithography. Later, the company decided to use the technology to make machines, which have cost $8 billion since the late 1990s.
The process of development spread quickly around the world. ASML now puts together advanced machines with mirrors from Germany and hardware made in San Diego that makes light by blasting tin droplets with a laser. Japan is a source of important chemicals and parts.
Peter Wennink, the CEO of ASML, said that the company’s lack of money in its early years forced it to combine inventions from specialty suppliers. This created what Wennink calls a “collaborative knowledge network” that can quickly come up with new ideas.
ASML was made possible by other international partnerships. At the beginning of the 1980s, scientists in the U.S., Japan, and Europe started to think about how light sources could change in a big way. Intel, two other U.S. chip makers, and labs run by the Department of Energy formed a group to work on the idea.
After more than a year of talks, ASML joined in 1999, according to Martin van den Brink, the company’s president and chief technology officer. The company also worked with the Imec research center in Belgium and the Sematech consortium in the United States. Intel, Samsung Electronics, and Taiwan Semiconductor Manufacturing Company later put a lot of money into ASML to help pay for its development.
Extreme ultraviolet light made it harder to build that thing because of how strange it is. Most lithography machines use lenses to focus light on wafers and make circuit patterns on them. But glass soaks up the small EUV wavelengths, so lenses won’t work. The same thing happens with mirrors, which are also often used to direct light. So, the new lithography needed mirrors with complicated coatings that worked together to reflect the small wavelengths better.
So ASML went to Zeiss Group, a German optics company that has been around for 175 years and has been a longtime partner. It made a two-ton projection system that can handle ultra-violet light. It has six specially shaped mirrors that are ground, polished, and coated over the course of several months by robots using ion beams to get rid of flaws.
Mr. van den Brink said that there were also delays because it took time to make enough light to project images quickly. But Cymer, a San Diego company that ASML bought in 2013, eventually improved a system that sends pulses from a high-powered laser to hit droplets of tin 50,000 times a second, once to flatten them and again to vaporize them, to make intense light.
Photomasks, which are like stencils and are used to project circuit designs, had to be redesigned for the new system, and new chemicals had to be put on wafers to make images when light is shined on them. Most of these products are now made by Japanese companies.
Since ASML put its commercial EUV model on the market in 2017, about 100 people have bought it. Samsung and TSMC, the biggest company that makes chips for other companies, are among the buyers. The tool is used by TSMC to make the processors that Apple designed for its new iPhones. EUV is very important to Intel and IBM’s plans, they have said.
Daro Gil, a senior vice president at IBM, said, “It’s the most complicated machine we’ve ever made.”
Since 2019, the Netherlands has made it illegal to send these machines to China. This hasn’t hurt ASML’s finances much, though, because it already has a lot of orders from other countries. But about 15% of the company’s sales come from China, where they sell older systems.
In March, the National Security Commission on Artificial Intelligence gave its final report to Congress and Mr. Biden. In that report, it suggested that export controls be put on some other high-tech ASML machines as well. The group, which is funded by Congress, wants to stop advances in artificial intelligence that could be used for military purposes.
Since China was already using these machines, Mr. Hunt and other policy experts said that blocking more sales would hurt ASML without giving China much of a strategic advantage. And so does the business.
“I hope common sense will prevail,” Mr. van den Brink said.
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