5 ms·

What happens if the EU-USA relationship deteriorates to the point that EU doesn't sell lithography machines and other equipment to the US, doesn't accept impor

by mrtksn 2y ago

What happens if the EU-USA relationship deteriorates to the point that EU doesn't sell lithography machines and other equipment to the US, doesn't accept imports made with chips from USA and requires these things be made in China, Korea or Japan? The reason I'm curious about this is that in my understanding for a fab to become financially viable it needs to produce grotesque amount of chips. Can America have state of the art fabs for a market of 340M people if the world becomes partitioned in the upcoming years? In Europe that was the main problem, people like to say that Europe lost on tech because of regulations but Europe lost on tech before EU become a thing, they simply didn't have a large enough local market for electronic components. Europeans got out of this market because it wasn't profitable, not because they couldn't figure out transistors etc.

alephnerd 2y ago
> EU doesn't sell lithography machines ASML's EUV Lithography IP is provided on contract by LLNL, and much of that IP is owned and implemented by Cymer LLC, ASML's US subsidiary. And it's individual nation states (in this case Netherlands) that can even make decisions on export controls, not the EU. In most cases, the Netherlands has largely been aligned with the US, and knows how to manage Trump thanks to Mark Rutte. EU Member states zealously guard their sovereignty in defense/NatSec and foreign relations matters, so it's less a question about the EU and more a question about Netherlands/France/Germany/<insert EU state here> > requires these things be made in China, Korea or Japan Most of the supply chain is already dependent on Japan and Korea and has been for decades. European players have largely been limited to legacy node fabrication chains because of the heavy focus on the automotive industry in Europe and the capital crunch during the Eurozone recession. That said, there are a decent number of European suppliers (eg. Merck for chemicals, ASML for EUV Lithography, Zeiss for optics, etc).
- mrtksn 2y ago
  I get that but just because they use licensed IP doesn't mean that they have to sell it to the USA. >And it's individual nation states (in this case Netherlands) that makes this decision, not the EU. That's the current state of affairs, it doesn't have to be the same in the upcoming months or years because "decades are happening in weeks" lately. The sovereignty stuff is what kept EU from becoming like USA but things are on move now. Check the approval ratings and trust of Europeans about EU and their local government and you'll see that Europeans tend to trust EU much more than the national government. EU is actually very popular with the general public, its the far-right and the far left that demonize it(they see it as an obstacle towards libertarian utopia or communism). Also, what if they just don't care about the license or replace the licensed IP with something from Korea/Japan? What if they just clandestinely sell those to China?
  - alephnerd 2y ago
    > I get that but just because they use licensed IP doesn't mean that they have to sell it to the USA If ASML loses access to the IP they cannot sell it in any market that respects IP laws, nor can it raise capital as it now has extremely legal liability. And if the Netherlands is ready to tear up it's IP laws, it's going to be de facto sanctioned by the US and the rest of the EU, because IP Law is one of the few things European nation states devolved to the EU. Also, around 20% of ASML's headcount is in the US, and much of that is R&D and manufacturing specifically for EUV Lithography. > The sovereignty stuff is what kept from EU becoming like USA but things are on move now. Check the approval ratings and trust of Europeans about EU and their local government and you'll see that Europeans tend to trust EU much more than the national government The EU has a better reputation amongst the population, yet at the end of the day, no actual power aside from single market and norms alignment has been devolved to the EU. As I have mentioned multiple times at this point, politicans and businesses do not want to reduce their power by handing it to the EU. It might be good for the EU member states at a macro level, but it creates a lot of losers at the national level. And those losers can vote for the AfD, RN, etc. For example, for a unified European army, either France, Germany, or Sweden is going to have to sacrifice their aerospace giants because Dassault, Eurofighter, and Saab compete directly and ferociously, and always undercut each other. And for tanks, Germany has to either sacrifice the entire chain for Leopold or France has to sacrifice the entire chain for Leclerc. All of these are tens of thousands of jobs in France, Germany, and Sweden, and no party wants to become toxic for a generation by become the party that sacrificed their voters with mass layoffs for the benefit of the EU as a whole. Individual European nation states need to align, and they just are not because Defense, Foreign Relations, and Internal Security has always been the mandate of individual states. > That's the current state of affairs, it doesn't have to be the same in the upcoming months or years because "decades are happening in weeks" lately It definetly is, but not in a good way. The major EU states had an emergency conference after Vance's horrid comments at MSC to try and align on a boots on the ground policy in Ukraine, but it was shot down by Poland and Germany [0] [0] - https://www.politico.eu/article/europes-leader-donald-trump-ukraine-peace-deal-emmanuel-macron-presidential-palace-donald-tusk/ https://www.politico.eu/article/europes-leader-donald-trump-...
    - 2y ago
MangoCoffee 2y ago
>What happens if the EU-USA relationship deteriorates to the point that EU doesn't sell lithography machines and other equipment to the US, doesn't accept imports made with chips from USA and requires these things be made in China, Korea or Japan? It has been posted here many times that the US started the EUV LLC to research EUV and allowed ASML to join. ASML doesn't hold all the cards. I doubt Americans are stupid enough to let ASML walk away with all the EUV IPs. https://www.eetimes.com/u-s-gives-ok-to-asml-on-euv-effort/ https://www.eetimes.com/u-s-gives-ok-to-asml-on-euv-effort/
- mrtksn 2y ago
  But this is not a card game, they can just build and ship these machines. IP and licenses are made up stuff to facilitate certain business transactions. You can just disregard those if you no longer care about those business ties. What USA will do? Send China DMCA complaint to tear down their ASML machines?
  - alephnerd 2y ago
    > What USA will do In this unrealistic worst case, shut down the ability for ASML to raise any sort of capital by litigating in just about every market, threaten $60B in Dutch exports to the US, and threaten felony status for much of ASML, Philips, and NXP's leadership. Oh and nationalize Cymer LLC, as the manufacturing and IP for ASML's EUV work is in ASML's US Subsidary (Cymer llc [0]), not the Dutch parent that's a spinoff of NXP and Philips [0] - https://www.cymer.com/ https://www.cymer.com/
    - mrtksn 2y ago
      I'm not convinced that legal structures can do anything between hostile countries. If that was possible they could have just sue Russia and get the war sorted out.
      - alephnerd 2y ago
        The ASML parent in Netherlands doesn't have access to the IP or manufacturing. It's all part of the US holding in San Diego (Cymer LLC).

by mrtksn 2y ago

alephnerd 2y ago

> EU doesn't sell lithography machines ASML's EUV Lithography IP is provided on contract by LLNL, and much of that IP is owned and implemented by Cymer LLC, ASML's US subsidiary. And it's individual nation states (in this case Netherlands) that can even make decisions on export controls, not the EU. In most cases, the Netherlands has largely been aligned with the US, and knows how to manage Trump thanks to Mark Rutte. EU Member states zealously guard their sovereignty in defense/NatSec and foreign relations matters, so it's less a question about the EU and more a question about Netherlands/France/Germany/<insert EU state here> > requires these things be made in China, Korea or Japan Most of the supply chain is already dependent on Japan and Korea and has been for decades. European players have largely been limited to legacy node fabrication chains because of the heavy focus on the automotive industry in Europe and the capital crunch during the Eurozone recession. That said, there are a decent number of European suppliers (eg. Merck for chemicals, ASML for EUV Lithography, Zeiss for optics, etc).

mrtksn 2y ago
I get that but just because they use licensed IP doesn't mean that they have to sell it to the USA. >And it's individual nation states (in this case Netherlands) that makes this decision, not the EU. That's the current state of affairs, it doesn't have to be the same in the upcoming months or years because "decades are happening in weeks" lately. The sovereignty stuff is what kept EU from becoming like USA but things are on move now. Check the approval ratings and trust of Europeans about EU and their local government and you'll see that Europeans tend to trust EU much more than the national government. EU is actually very popular with the general public, its the far-right and the far left that demonize it(they see it as an obstacle towards libertarian utopia or communism). Also, what if they just don't care about the license or replace the licensed IP with something from Korea/Japan? What if they just clandestinely sell those to China?
- alephnerd 2y ago
  > I get that but just because they use licensed IP doesn't mean that they have to sell it to the USA If ASML loses access to the IP they cannot sell it in any market that respects IP laws, nor can it raise capital as it now has extremely legal liability. And if the Netherlands is ready to tear up it's IP laws, it's going to be de facto sanctioned by the US and the rest of the EU, because IP Law is one of the few things European nation states devolved to the EU. Also, around 20% of ASML's headcount is in the US, and much of that is R&D and manufacturing specifically for EUV Lithography. > The sovereignty stuff is what kept from EU becoming like USA but things are on move now. Check the approval ratings and trust of Europeans about EU and their local government and you'll see that Europeans tend to trust EU much more than the national government The EU has a better reputation amongst the population, yet at the end of the day, no actual power aside from single market and norms alignment has been devolved to the EU. As I have mentioned multiple times at this point, politicans and businesses do not want to reduce their power by handing it to the EU. It might be good for the EU member states at a macro level, but it creates a lot of losers at the national level. And those losers can vote for the AfD, RN, etc. For example, for a unified European army, either France, Germany, or Sweden is going to have to sacrifice their aerospace giants because Dassault, Eurofighter, and Saab compete directly and ferociously, and always undercut each other. And for tanks, Germany has to either sacrifice the entire chain for Leopold or France has to sacrifice the entire chain for Leclerc. All of these are tens of thousands of jobs in France, Germany, and Sweden, and no party wants to become toxic for a generation by become the party that sacrificed their voters with mass layoffs for the benefit of the EU as a whole. Individual European nation states need to align, and they just are not because Defense, Foreign Relations, and Internal Security has always been the mandate of individual states. > That's the current state of affairs, it doesn't have to be the same in the upcoming months or years because "decades are happening in weeks" lately It definetly is, but not in a good way. The major EU states had an emergency conference after Vance's horrid comments at MSC to try and align on a boots on the ground policy in Ukraine, but it was shot down by Poland and Germany [0] [0] - https://www.politico.eu/article/europes-leader-donald-trump-ukraine-peace-deal-emmanuel-macron-presidential-palace-donald-tusk/ https://www.politico.eu/article/europes-leader-donald-trump-...
  - 2y ago

MangoCoffee 2y ago

>What happens if the EU-USA relationship deteriorates to the point that EU doesn't sell lithography machines and other equipment to the US, doesn't accept imports made with chips from USA and requires these things be made in China, Korea or Japan? It has been posted here many times that the US started the EUV LLC to research EUV and allowed ASML to join. ASML doesn't hold all the cards. I doubt Americans are stupid enough to let ASML walk away with all the EUV IPs. https://www.eetimes.com/u-s-gives-ok-to-asml-on-euv-effort/ https://www.eetimes.com/u-s-gives-ok-to-asml-on-euv-effort/

mrtksn 2y ago
But this is not a card game, they can just build and ship these machines. IP and licenses are made up stuff to facilitate certain business transactions. You can just disregard those if you no longer care about those business ties. What USA will do? Send China DMCA complaint to tear down their ASML machines?
- alephnerd 2y ago
  > What USA will do In this unrealistic worst case, shut down the ability for ASML to raise any sort of capital by litigating in just about every market, threaten $60B in Dutch exports to the US, and threaten felony status for much of ASML, Philips, and NXP's leadership. Oh and nationalize Cymer LLC, as the manufacturing and IP for ASML's EUV work is in ASML's US Subsidary (Cymer llc [0]), not the Dutch parent that's a spinoff of NXP and Philips [0] - https://www.cymer.com/ https://www.cymer.com/
  - mrtksn 2y ago
    I'm not convinced that legal structures can do anything between hostile countries. If that was possible they could have just sue Russia and get the war sorted out.
    - alephnerd 2y ago
      The ASML parent in Netherlands doesn't have access to the IP or manufacturing. It's all part of the US holding in San Diego (Cymer LLC).