Netherlands’ Semiconductor Export Restrictions: Impact on China and Global Technology

The Netherlands government has recently imposed partial restrictions and control on exporting semiconductor manufacturing technology, equipment, and related software to China. This move, likely influenced by discreet advice or directives from the United States, appears aimed at preventing critical photolithography technology from reaching China’s hands. On January 15, Wednesday, China’s administration expressed significant concerns over the decision through an official statement.

The Xi Jinping-led Chinese government perceives this as a strategic effort by certain influential nations to hinder China’s progress in the global semiconductor industry. By invoking national security concerns, these nations are attempting to control the transfer and export of semiconductor technologies, posing a severe threat to the stability of the global semiconductor supply chain. China has strongly opposed such misuse of restrictions and laws. This scenario highlights the ongoing geopolitical rivalry and fierce competition between China and the United States over control of the global semiconductor industry.

The Global Importance of the Semiconductor Industry
Semiconductors, or chip design, manufacturing, and marketing, have emerged as a vital sector in recent years. The industry forms the backbone of digital and electronic devices, providing essential components like micro and nano-sized chips and integrated circuits crucial for technological advancements. Currently, tech giants like Intel, NVIDIA, Samsung, ASML, and TSMC dominate this highly promising industry.

Projected Growth in the Semiconductor Market
According to several research organizations, the global semiconductor market size is projected to reach approximately $996 billion to $1 trillion by 2030. Data from the World Semiconductor Trade Statistics (WSTS) reveals that in 2025, the semiconductor market size is estimated to grow by 12.5% to $687.18 billion. In contrast, it was around $626.87 billion in 2024 and $526.89 billion in 2023.

The demand for advanced nano-meter chips has significantly increased globally, especially in digital and electronic products like memory and logic sectors, AI chips, defense, drones, 5G telecommunications systems, aviation, and automotive solutions. This demand could potentially triple the market size in the next decade. Leading nations in advanced semiconductor or nano-meter chip manufacturing include Taiwan, the Netherlands, the United States, China, Japan, the UK, Germany, France, and South Korea.

Netherlands’ Leadership in Photolithography Technology
According to data from the Companies Market Cap website, while 18–20 countries manufacture semiconductors globally, the Netherlands is the sole producer and exporter of the core technology for high-tech chip design and manufacturing: extreme ultraviolet lithography (EUV) systems or photolithography machines. Although China and Japan have claimed advancements in photolithography technology, their developments remain at preliminary and experimental stages.

The Dutch multinational corporation Advanced Semiconductor Materials Lithography (ASML) is the exclusive producer and exporter of these highly advanced photolithography machines. Established in 1984, ASML has maintained its dominant position in the EUV lithography sector.

ASML’s Market Position
According to the Companies Market Cap website, ASML’s market capitalization in January 2025 was $295.01 billion, making it the 33rd most valuable company globally. As per Wikipedia, the company generated $28.35 billion in revenue and $7.84 billion in net profit in 2023.

Despite competition, ASML continues to lead in designing, manufacturing, and supplying EUVL or photolithography technology. Even global superpowers like the United States, China, and Russia lag in achieving this technological capability. This explains the United States’ strict oversight of the Netherlands to prevent this critical technology from falling into Russian or Chinese hands.

Sources: Wikipedia, World Semiconductor Trade Statistics (WSTS), CM