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Comment by mrtksn | Hacker News Reader

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.

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> 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).

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?

> 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-...

> 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.

This is absolutely correct. That’s why the common EU military cannot be an EU equivalent of the U.S. military.

However, the EU itself is a novel and unique structure that was invented out of thin air. A common EU policy would also have to be a completely new model. One that’s closer to NATO but also has an actual common command with actual teeth that can call upon its French or German division to take certain steps that those divisions cannot refuse.

I agree. I think Macron's proposal for a tiered EU membership model might work as well - give some states the unified market and contracts enforcements, give other states that plus unified military posture under a single command, give other states almost complete devolution of powers to the EU

> that can call upon its French or German division to take certain steps that those divisions cannot refuse

A major additional issue is national constitutions as well. For example, Germany's constitution doesn't allow an expeditionary force outside of NATO territory, which pisses off France and Netherlands because they both have dependencies outside of NATO that face pressure from China (French Polynesia, Mayotte) and Venezuela (Dutch Antilles).

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And the question of Turkiye remains, becuase it's the only NATO state that has direct combat experience against Russian forces (Libya, Syria, Nagorno-Karabakh in 2016) and mass deployment.

Turkiye needs to be integrated as part of the EU's structure, otherwise the EU will continue to lack the heft needed to defend itself.

But Greece, France, and Cyprus will continue to veto Turkiye because of North Cyprus (Greece, Cyprus) and business+geopolitical conflicts (France)

Ironically, Germany has been quietly receptive to including Turkiye in the EU as German businesses and MICs are closely aligned with Turkiye.

>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/

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?

> 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/

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.

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).

What do you mean they don't have access? Maybe they kept copy of the technical documents and just keep building the machine and send them to China and not send them to USA?

ASML is a HOLDING company.

National Labs are part of the US Defense apparatus and have massive compliance and firewalling requirements, and constant audits.

Any attempt by ASML Holdings to exfiltrate data and IP from Cymer LLC (a DoE contractor) opens ASML leadership to criminal charges, and makes them toxic in any deal.

It might not matter to you, but it absolutely puts the Dutch economy at risk.

And anyhow, all the manufacturing is done in San Diego and Livermore anyhow.

These things are important only at peacetime. Also, some parts being made in USA only means that they need to find a new supplier and if that doesn't exist then can help someone to figure it out.

USA is an important partner but nothing is more important than the wellbeing of the immediate neighboring countries because USA is actually a distant 5th trading partner for the Dutch with less than %5 of the trade, it is as about as important as Italy. You can't have prosperous Netherlands with struggling Europe.

The manufacturing for the EUV portions of EUV Lithography machines built and sold by ASML is done entirely in America (SoCal area) by an autonomous subsidiary (Cymer) that is a partnership with a National Lab. As a result, the Dutch portion has limited access to the intricacies.

I don't know why this isn't getting into your head.

> And anyhow, all the manufacturing is done in San Diego and Livermore anyhow

Could you define "all"?

From your comment it seems all stories about ASML having a quasi-monopoly in lithography machines are nonsense. So it's the US holding the chip cards? That makes the China vs Taiwan debacle even less important to the US, since there's nothing to worry about.

> ASML having a quasi-monopoly in lithography machines are nonsense

They absolutely do, and it's becuase the US chose to give it to ASML Holdings instead of Nikon due to antitrust concerns in the 2000s-early 2010s.

> Could you define "all"?

Lithography machines are complex and filled with several parts. The primary part that allows you to do light based lithography is the Light Source - a very advanced form of Laser. This is what Cymer manufactures and developed in conjunction with Lawrence Livermore National Labs. But technology in isolation is useless - it needs to be capitalized in order to be built and utilized. This is why LLNL brought ASML in as a private sector partner for Cymer.

> That makes the China vs Taiwan debacle even less important to the US

The "Taiwan Chips" aspect was always nonsense that was literally lobbied by Intel in 2019 to force TSMC to burn $20B building a factory in Arizona while giving Intel some breathing room to build a Foundary IDM.

Also, the intermediate parts for fabrication are largely manufactured in Japan and South Korea. There are a number of vendors in Taiwan now, but there is an ecosystem in the other two as well.

> less important to the US, since there's nothing to worry about.

Wrong. Taiwan is part of the first island chain. Without Taiwan, much of the US's Pacific seaboard becomes very difficult to defend, and leaves us open to a Pearl Harbor 2.0.

Even in 20th century, the only time the US ever lost land was to the Japanese when they invaded American Phillipines, portions of Alaska, and planned to invade Hawaii.

This is why you see horrible unseriousness about Ukraine by US admins. Ukraine is bad, but Taiwan is existential for the US, and why just about every US admin is much more worried about China compared to Russia.

No European nation other than France has the capacity to help us in the Pacific, so they may as well help load balance/burden share in Europe and MENA. It will make both North America and our European allies stronger.

IPs only matter when both countries agree that they matter.

In the eventuality that the US is seen as a foreign hostile country by EU members, which seems increasingly likely, those IPs do not need to be respected anymore.

Unless your argument is that "EU chimps cannot figure out how to do lithography thenselves". Then I'll have a very hard time to take your argument seriously.

> In the eventuality that the US is seen as a foreign hostile country by EU members, which seems increasingly likely

First, I absolutely think Trump and Vance's conduct was horrid.

That said, even after the past 2 weeks, European states are hesitant to provide boots on the ground to Ukraine [0][1].

Online (especially on English speaking Reddit and HN) there is strong support to help Ukraine, yet it seems individual members of European states do not wish to truly commit to Ukraine, due to political implications. If even Poland [1] does not want to provide boots on the ground, and Germany and France still want US boots on the ground in order for them to commit to Ukraine [1], then there is a fundamental problem with Ukraine's current posture.

Even if Harris was president today, a similar outcome would have happened.

As I have stated multiple times before, I don't think Europeans on Reddit/HN realize that China is the bigger issue for the US, not Russia (European leadership does recognize this and is trying to accommodate the US as such - look at the UK and Türkiye's commitment to Ukraine over the past decade).

We have no actual defense in depth in the Pacific and have seen this first hand in WW2 with the Japanese invasion of American Philippines and Alaska and much more recently during both the SCS Standoff and Senkaku Diaoyu, but our allies in Europe can provide that for us in Russia. Nor do we expect our European allies except France (because of French Polynesia and Mayotte) to help us in a Indo-Pacific War

If WW3 does happen, there will be no American soldiers in Kirkenes, we will be in the Kinmen Islands

> Unless your argument is that "EU chimps cannot figure out how to do lithography thenselves". Then I'll have a very hard time to take your argument seriously.

Europe (and China, South Korea, Japan, India, etc) absolutely can. Question is over what time period (2 years, 5 years, 10 years?).

There needs to be a united "Europe" but there really isn't. When push comes to shove, European states devolve into bickering with each other because diametrically opposed interests.

If an Obama 2 era Dem staffer like me is ticked off, then you should realize your leadership has burned any goodwill that remains in the American NatSec space. The Koreans and Taiwanese tick us off, but at least we know they will fight if push comes to shove. The only European states with a similar resolve are France, UK, Turkiye, Poland, Netherlands, and maybe Romania. We warned your leadership that an American president like Trump would eventually come, yet your leaders did not listen.

At least your leadership recognizes this now, but has to work overtime because the Trump admin are incompetent at messaging.

It will be better for both the US and our European allies if Germany, Netherlands, etc adopt a France+UK style policy of strategic autonomy. Maybe include Turkiye while you're at it otherwise they will make Balkan and Caucasus Integration impossible

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Also, none of the above sidesteps the fact that 20% of ASML's personnel is in the US, and ASML's light source technology (the primary part used for EUV and DUV) is manufactured and innovated by an JV in San Diego between ASML and Livermore Labs.

[0] - https://www.thetimes.com/world/russia-ukraine-war/article/ai...

[1] - https://www.politico.eu/article/europes-leader-donald-trump-...

China would be salivating at the prospect of getting these machines that EU can't/won't sell to the US.

I don't understand why Trump is so anxious to be buddies with Putin when Russia is aligned with China. It's feeling like an oligarch's world where under the table deals are what matters and the nationalist rhetoric is just a smoke screen.

> China would be salivating at the prospect of getting these machines that EU can't/won't sell to the US

The EUV portion of the machines are made in the US - it's manufactured by ASML's subsidiary Cymer, down in SoCal.

At some point, we start to talk about military action.

It's not clear where the current US government will draw the line, and they would be crazy to draw the line at IP licensing... but well, I have some bad news.

I have absolutely no idea what is the Trump's (or Musk's, or whoever is calling the shots) endgame is. There is the chance that military action is inevitable. It's really bad either way.

Also, the entire EUV portion of ASML is owned and manufactured by Cymer in San Diego.

They are part of ASML, but firewalled from the rest due to DoE and Federal Contractor requirements.

It' really interesting to see how interconnected supply chains work.

Query: who are ASML's subsidiaries?

1. Cymer (Acquired in 2013)

    A U.S.-based company specializing in EUV and DUV light sources. Cymer provides the laser-produced plasma (LPP) EUV sources used in ASML's EUV scanners.

2. Berliner Glas (Acquired in 2020)

    A German company specializing in high-precision optical components. Helps ASML develop optical lenses and mirrors for lithography machines.

3. HMI (Hermes Microvision, Acquired in 2016)

    A Taiwanese company focusing on e-beam inspection and metrology. Enables ASML to enhance defect detection in semiconductor manufacturing.

4. Carl Zeiss SMT (Strategic Partner, Not Owned)

    ASML has a strategic partnership with Carl Zeiss SMT, which supplies high-precision optics and mirrors used in EUV systems. While ASML doesn’t own Carl Zeiss, it invested heavily in their R&D for EUV optics.

Yep! And ASML Holdings itself is a spinoff of NXP Semiconductors (primarily legacy nodes used in aerospace and automotive - VERY mission critical), which itself is a merger of the older Motorola Semiconductor division which landed us on the moon as well as Philips N.V.

>What USA will do?

FAFO.

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