ASML Holding, a major supplier of semiconductor equipment to semiconductor manufacturers, has fallen on Tuesday following a Bloomberg News report that the US government wants the company to prohibit it from selling its equipment to China.
ASML has already been unable to send its most advanced tools to China, but according to a source, Washington would also prohibit the sale of somewhat older machines.
ASML's spokeswoman said the company was unaware of any policy changes.
The conversation is not new, according to the spokesperson. No decisions have been made, and we do not want to speculate or comment on rumors.
ASMLs US stocks fell 7.2 percent as a result of the report.
Lam Research fell by 3.6 percent while Applied Materials fell by 2.4 percent.
After Taiwan and South Korea, China is ASML's third largest market, accounting for roughly 16 percent of sales in 2021, or EUR 2.1 billion (nearly Rs. 17,100 crore).
ASML is a near-monopoly on the design of lithography systems, which are critical for chipmakers such as Intel, TSMC, and Samsung. Lithography systems cost hundreds of millions of dollars each and use focused light to create the circuitry of computer chips.
Computer chips are considered to be dual use technology, with military as well as commercial applications.
In accordance with the US, the Dutch government has not given ASML permission to sell its most advanced machines, which utilize extreme ultraviolet, or EUV, light waves, to Chinese chipmakers.
ASML continues to sell deep ultraviolet, or DUV, equipment to Chinese consumers.
The majority of chips worldwide are made using DUV lithography. Restricting their sales to China would be extremely detrimental to China's chip industry and would likely worsen a global semiconductor shortage.
The National Security Commission on Artificial Intelligence headed by former Google CEO Eric Schmidt suggested that the US Departments of State and Commerce should pressure allies to refuse access to the top DUV, EUV, and related tools in 2021.
2022 Thomson Reuters