That said, the caveat here is the "neither US nor China" part, why would ASML, a Dutch company, align itself with US?
I know quite some people at ASML and I worked a bit in lithography in the past. Yes, it's extremely hard to make a machine that can compete with ASML's. But given enough smart people, I'm convinced that it's totally possible. Making a machine that can compete with what ASML could do, say, 20 years ago is a matter of 10 people and 2 years (I did some contracting at a company that did just that). If you start there and then just keep adding the right kind of talent, then I bet in 10-15 years you can get impressively close.
Don't underestimate the enormous amount of technical and engineering debt ASML has accumulated through decades of mad deadline pushing. Nobody has time to invest in eg automated tests or anything that lets you guard code quality because all the good engineers are needed on the critical path to make the next deadline, and there's always a next deadline and it's always 3 months sooner than in any way reasonable. This is how they became a world monopoly, effectively. It's been a good strategy. They ship so early that the machines they sell simply don't work yet, so they put two engineers inside the box with it who (together with 50 more engineers back home) make the thing actually work while the customer sets it up in their fab.
As a result, their codebase is a steaming pile of shit. Copy & paste galore. An example: the code is so bad that you can't just fix bugs. If you find an off-by-one error in the code and you want to fix it, you first write a "risk assessment document" where you describe what the bug does and whether any code could potentially rely on the presence of the bug. Then multiple layers of risk assessment officers assess whether you get a go. Then, if you get a go, you can go and fix your off-by-one error in similar-but-not-the-same C files across 7 product families.
To be honest I don't know if the same holds for ASMLs mechanical engineering, physics, electro etc departments, but their software dept (a large percentage of their entire R&D) is easily 10x less productive than similarly sized and skilled software teams elsewhere. It's really mind boggling.
I'm convinced that a good startup with a good mindset, plus sufficiently good funding, can totally build a competitor. China just has to fund 20 litho startups so that 19 can mess it up and 1 makes it big.
We got to a .8 micrometer error margin, which is "an enormous valley" by ASML standards but still fine for the top ~5 layers of normal semicon designs, where there's typically way fewer lanes, placed more widely apart. Again, I don't know much about chip design so I probably got all the details wrong.
Basically, yes there's a market. It's not at all as big as ASML's but it doesn't need to be. There's also a market of refurbishing old ASML/Canon/Nikon machines and repurposing for different parts of the production process (either chips or other semicon stuff like LEDs), which is what a new litho startup would compete with I think.
Note that all my knowledge about this is 5 years outdated, I now run a chat api startup :-)
To me, the semiconductor fabrication world is like an opaque industry where you need a significant amount of capital to do anything useful. Very happy to learn that startups are getting a chance too. Super curious to know if the company made it.
I know it's easy to say "we did great but the HQ fucked it up" so I don't want to make that claim. I honestly don't know where it went wrong (and I was way less interested in sales and marketing and entrepreneurship then, so I didn't ask).
I learned everything I know about lean and agile and just shipping from our R&D lead though. He was ex-ASML and they definitely know how to ship.
Examples abound. Look at what happened to BNP Paribas. This is how it looks in a press release:
https://www.reuters.com/article/us-bnp-paribas-settlement-se...
"Georges Dirani, BNP’s general counsel, told the judge that the bank accepted “full responsibility for its conduct"
"There’s no question the organization will not tolerate the kind of behavior we have seen in this case,” Dirani said."
Am I missing something or did you just submit a terrible example for your allegation?
The issue at stake is how extraterritorial the US legislation is.
Should the US government be able to determine that an EU company cannot do anything anywhere anytime involving US dollars if it has Iranian clients for example?
"BNP Paribas has been present in the United States since the late 1800s and currently has over 16,000 employees in North America." [1]
From the article: "The sentencing followed BNP Paribas’ guilty plea in July to conspiring from 2004 to 2012 to violate the International Emergency Economic Powers Act and the Trading with the Enemy Act."
You violate Acts and you want to operate in the US, you get sentenced. If they want to play ball, they need to follow the laws.
"Authorities said that BNP essentially functioned as the “central bank for the government of Sudan,” concealing its tracks and failing to cooperate when first contacted by law enforcement."
You had written - "The US have a long track record of using soft power and extraterritorial law to punish foreign states and companies, including supposed allies"
Again, you submitted a terrible example.
ASML didn't have a choice in the matter. The US government pressured the Dutch government to withdraw the export license. That's at the diplomatic level, way above the heads of company executives. The Netherlands is part of NATO and is more closely aligned with the US than with China. But the Netherlands could at some point decide that it just wants to do business with everyone.
(Διογένης, I like your "bottleneck" much better than Brookings' word choice)
The second issue here is Europe's continued weakness. If ASML controls EUV lithography then Europe should be much more assertive.
Just one example: the French government has made noises about doing something to counter the United States' extraterritorial application its sanctions regime. US sanctions against Iran effectively apply to European companies, even if they have basically nothing to do with the US. The US can unilaterally force the EU to stop doing business with Iran. The French see that as a violation of their sovereignty.
The problem is, if France proposes to do anything about it, Germany will object, because Germany fears that the US will retaliate against the German automotive industry.
Imagine if the US could only take action when 50 states all agreed. There's no powerful central government in Europe that can decide to temporarily sacrifice some interests in order to achieve something more important - establishing independence of action from the US on sanctions policy.
I was under the impression that Germany is generally on board with the idea of using the INSTEX special-purpose vehicle to trade with Iran despite US sanctions. Of course the first (and only?) transaction was only completed this year, so the mechanism doesn't look too successful so far: https://www.auswaertiges-amt.de/en/newsroom/news/instex-tran...
The EU would have to take much stronger measures if it was really serious about preventing the US from imposing its sanctions regime on European companies. I'm not an expert, so I can only guess at what sort of measures Europe would have to take, but I imagine they would involve reciprocal retaliation for any measures the US takes to punish European companies.
I don't think that the US's aggressive stance is in Europe's interests to follow. Standing your ground, sure, but this confrontation seems counterproductive in the long term and, again, is simply trying to delay the inevitable, IMO.
It seems like Europe will have to build up its military if it wants to be able to stand alone. Not that I think a multi-polar world is good for stability. I think US leaders used to keep that in mind a bit more before trying to leverage their position.
Why do you think the EU wants to throw all of this good away?
Are you kidding me? Why do you think we ( the Dutch ) are in Iraq and Afghanistan?
If the US asks, we ask : how high?
Currently: not so much. The value of the US with shared 'western' values is greatly declining, since they are retreating from almost every partnership.
Completely agree. America has a lot to do to gain it back; it's a long process.
"Squeezing allies" sounds interesting. Maybe they shouldn't be "squeezed" in the first place, so it's good that they can't? On the other hand, if, for example, Europe sees the benefits in countering some specific China expansion issue, USA won't need to ask too much for a concerted response.
And frankly, Western alliance has no alternative today; maybe only going alone - or as a European Union, but USA (and Canada to a degree) are still the best partners. That doesn't mean, of course, that USA doesn't make bad mistakes lately.
Not sure how to read this.
> Western alliance has no alternative today
Of course not, every single alternative is considered an enemy by the USA and any attempt to have a relationship with them has to be sanctioned by the USA or face punishment. If these were companies the move would be monopolistic, anti-competitive, exclusive dealing, all illegal. But it's not companies, it's international relations, where some are still free to consider torture legitimate and moral.
Putting aside the arbitrary choice of who's a terrorist state and who's a "trusted ally" (Iran vs. Saudi Arabia?), trying to cooperate with countries like Iran, Russia, or China can be arbitrarily (depending on interest) seen as an aggressive act of "disobedience" and is punished. Even if the sanctions were unilateral and with no agreement from other allies.
- throw its lot in with the u.s and take it when it hurts
- throw its lot in with another aspiring hegemon and take it when it hurts
- do what it taker to go it alone.
the second does not seem particularly appealing; between putin russia, a xi prc and a trump u.s, i think the u.s is best of a bad bunch. and its fair to say they have more upside than down; i would favor good government returning to the u.s and be reluctant to favor improving government returning to china or russia.
small, isolated western countries like au and n.z have effectively no choice in the matter: they get to pick china or the u.s, and china have made it clear they intend that choice to be hobson's choice.
the e.u has a choice. will they take it?
It's always about the ratio between the benefit and the "taking it when it hurts". With other presidencies the ratio was OK. But with the rise of populism the moves are left to someone playing to please people with no understanding of the small or big pictures. And it's hard to forget when "friends" decide to abuse the stick because the carrot didn't sit well with their voting base.
Assuming that current will be not be the same as next one.
Sometimes there is a tendency to forget that there is more to the USA than Trump and co. I think most Europeans are well aware of the "battle for the soul of America" within USA. The retreats from partnerships are most likely only a temporary glitch.
Semiconductor industries has been growing into a very tightly coupled and globalized eco-systems these days. No one country can own or domesticate the entire ecosystem or supply chains, albeit companies headquarters in the U.S. still own a significant portion of the technologies and intellectual properties.
It will be interesting to see if European countries begin to try to push back against this policy. Imposition of American sanctions against Iran on European companies have already caused a good deal of consternation in Europe. But so far, the EU has been too fractured to do anything serious about it.
I suppose that much of the tech is already in the scientific literature, and the "only" problem left is putting the pieces together.
ASML people like to describe it as "a bit like having robot controlled helicopters tie a rope around a skyscraper in a heavy storm, while not crashing nor pulling the skyscraper over" iirc.
This is because at nanoscale, every vibration is a huge movement, and even the flattest surface is mountainous. An ASML machine is basically little more than tons of little sensors and control mechanisms to detect all these vibrations and surface shapes and to adjust the light beam positioning accordingly.
Because of this, nearly the entire company (several thousand people R&D staff) is focused on "putting the pieces together". Eg they do comparatively little deep research. It's all engineering.
So even if the 'only' problem is putting the pieces together, that doesn't mean it is even possible. Look at it another way-- same thing can be said about Nuclear Fusion :D
I suppose that Apple or Google would be able to pull it off though.
The Netherlands has benefited greatly from 400 years of the dominance of western civilization, and I assume they would want to see that continue?
This is not moral suasion, this is pure and simple bullying.
Netherlands is a founding NATO member. It boggles my mind how this is even a question to anyone.
France has always been kind of contrarian. For example, they are NATO members but unbelievably they were also selling Russia a couple of Mistral landing platform docks.
Tons of high profile people have been talking about how it is not tolerable that the US is unilaterally forcing embargoes using the $US and tech as a weapon. Development of alternatives take time, but this has already started.
The goal is not to replace the US with China. Not only things are not reducible to a single dimension, but even if they were, it does not make the need to enforce our own sovereignty disappear.
France left once, and came back. They used to pander to communist regime during the Cold War. During the NATO bombing during the Yugoslavian dissolution, a French General was caught giving out the bombing plans to the enemy.
No wonder nobody likes their foreign policy, and Macron is puzzled why the other EU countries don’t follow France in creating a Common EU military force.
The other countries know when push comes to shove, the US is a reliable partner, while France is not.
Plus it might be insanely profitable to stand with China when it comes to chip and gadget production.
So a decision to deny US interests would both have a huge upside and be popular with the majority of voters.
There are a lot of decision-making processes in governance that involves a lot more than 'we don't like the current president'.
What the US seems to expect is other countries to side with the US over their own interests.
Given how the EU allowed Russia to steamroll the Ukraine, why would the Chinese regime's attacks on Hong Kong would deserve more attention.
China is systemically stealing IP from European companies, research from European universities, and forcing labor into a race to the bottom. Europeans would be wise to stand with Trump on this.
There is nothing wise about "standing with Trump" on any issue. His impact on allies is a kin of a moped doing figure 8s on a pigsty.
And no country stands with Trump on anything. At most they stand with the current US administration, which happens to be presided by Trump. Trump the citizen is repellent and has no redeeming qualities.
And by the way, Europe has its best interests in mind, and the current US administration already made it quite clear that the US under the Trump administration is a highly unreliable ally, and even a potential liability that's compromised by Europe's current biggest threat.
My point here is that most of these issues look easy from the outside, but it's still difficult to do the right thing once you are involved.
https://www.politico.eu/article/josep-borrell-chinas-move-in...