Source: Bloomberg
Summary
ASML Holding NV has been restricted from exporting its most advanced chipmaking equipment to China due to US export controls. The company has not been accused of violating these controls, but there is a concern that it might risk its export license to arm a Chinese customer. However, there is a commercial logic that suggests ASML would not take this risk.
Our Reading
The announcement sounds ambitious.
ASML’s export license is a valuable asset, and risking it to arm a Chinese customer would be a significant gamble. The company’s business model relies heavily on selling equipment to customers in the US and other countries that impose export controls. Losing this license would severely impact ASML’s revenue and profitability. It’s unlikely that the company would take this risk, especially when there are other customers in the US and elsewhere that it can sell to.
This is just another example of a company trying to balance its business interests with the complexities of international trade and geopolitics.
Author: Evan Null
