The head of ASML, the chip toolmaker that is Europe’s biggest tech company, said he was guarding against intellectual property theft more fiercely than “ever before”, as a geopolitical tussle forces China to bolster its homegrown semiconductor industry.
Peter Wennink said growing restrictions imposed by the US on China’s ability to source cutting-edge chips and semiconductor equipment had raised the stakes for the company’s security efforts.
“It’s like 1973, it’s like the oil crisis,” Wennink told the Financial Times, pointing to increasing efforts by the US, Europe and Japan to bolster their domestic chipmaking capabilities. “Oil was always there until it wasn’t, and it was a strategic commodity. Fast forward to 2020 and it’s the same thing with chips.”
The chief of ASML, a key supplier to the world’s largest semiconductor manufacturers, said that China had been given no choice but to forge its own advanced chip ecosystem because of the tough unilateral US sanctions imposed last year. “If you are at the risk of being cut off, of course you’re going to do it yourself,” he said.
ASML revealed last month that an employee in China recently stole information about its technology, sparking concern in Washington that the eastern power might employ nefarious methods to circumvent western sanctions and build a chip sector of its own.
While Wennink said there was no evidence the theft had been state sanctioned, he said: “Is it going to be easy [for China to develop its own chipmaking equipment]? Absolutely not. Do we have to be highly sensitised on knowhow leakage, on IP leakage? More than ever before.”
Wennink said ASML had to increase its spending on cyber security and protecting its IP by a “significant double digit” percentage every year as it fended off thousands of security incidents annually.
The industry veteran, who has been with ASML for 25 years, was speaking from the company’s headquarters in Veldhoven ahead of expected announcements by the Dutch and Japanese governments this week about details of new export controls agreed in January after intense lobbying from the US.
ASML, the largest tech company in Europe with a market capitalisation of €238bn, holds a crucial position in the chip supply chain as the only group able to make highly sophisticated extreme lithography (EUV) machines — a key ingredient in the production of high-end chips.
It has found itself entangled in the trade war between Washington and Beijing since 2019 when a shipment of one of its EUV machines to China was blocked. The latest set of trilateral controls are expected to throttle its ability to sell its equipment to China further, targeting some of its deep (DUV) machines that are used to pattern details on to microchips.
The chief executive, who has expanded ASML’s business in China to now account for about 18 per cent of total sales, has been critical of escalating trade tensions that have undermined the global chip ecosystem.
Wennink warned governments against descending into protectionism, arguing that the chip sector had enabled huge advancements in societies across the globe.
China “took 800mn people out of poverty because they became part of this worldwide innovation forum of which semiconductors have played a significant part,” he said.
