ASML, a leading tech company from the Netherlands, is facing tough times due to the ongoing tech competition between the United States and China. Known for making advanced machines essential for producing computer chips, ASML is caught in the middle as the US restricts its sales to the Chinese mainland.
Just a year ago, China was one of ASML’s biggest customers, making up nearly half of its global sales. But the new US rules have caused a sharp drop in orders from the Chinese mainland, and the company expects its revenue from China to decrease to about 20% next year. This has led to ASML’s net profit falling by nearly 16% compared to last year, and its stock price has taken a big hit—the largest drop in 26 years!
ASML’s CEO, Christophe Fouquet, isn’t happy about these restrictions. He believes that limiting ASML’s normal business hurts the company’s economic interests and could lead to bigger problems down the line. He also points out that the global semiconductor supply chain is all connected, and trying to separate it would be expensive, complicated, and bad for economic growth.
Because of these challenges, ASML is talking to the US government to understand how the export rules affect them and to try to regain some control over their business operations.
But it’s not just ASML that’s feeling the heat. Other European tech companies are also affected by US policies like “America First,” which puts American interests ahead of others. Countries like Germany, France, and Sweden are taking steps to support their own tech startups and reduce their dependence on US tech giants. They’re creating new laws to make the market fairer for European companies, hoping to boost innovation and keep talent from leaving Europe.
However, these policies can make it harder for European tech companies to compete globally. They might lose access to the huge US market and face challenges in growing their businesses. Plus, top tech talent might choose to work in places with better opportunities, like the US, which could slow down innovation in Europe.
ASML’s situation shows how global politics can impact businesses and technology. For young people in the Global South, understanding these dynamics is important because it affects the technology and devices we all use every day. As countries navigate these complex relationships, companies like ASML must find ways to adapt and continue innovating.
Reference(s):
Dutch firm ASML becomes 'hostage' in China-US tech competition
cgtn.com
