Netherlands joins US chip pact while fighting ASML export curbs

The Netherlands has joined a US-led alliance on chips and artificial intelligence, despite actively lobbying Washington this week not to adopt a bill that would give the US the power to block ASML, the country’s most valuable listed company, from selling some of its machines to China.

Foreign trade minister Sjoerd Sjoerdsma signed a declaration joining Pax Silica in Washington on Tuesday. The initiative, launched by the US last December, will coordinate chip and AI supply chains to reduce reliance on China.

The alliance already has Japan, South Korea, the UK and Australia among its members. The Netherlands attended the launch last year but had held off signing until now.

Sjoerdsma travelled to Washington mainly to argue against the proposed MATCH Act, which would let the US block ASML from selling and servicing its less advanced machines in China.

The company’s most advanced systems, made nowhere else in the world, have been barred from China since 2019; the machines the bill targets account for about a fifth of ASML’s expected revenue this year, according to the Financieele Dagblad.

Cautious alliance
The government says it waited to join Pax Silica until it could move alongside its European partners. The European Commission signed up on the same day. “We consider it of crucial importance that if we join something like this, we do so in good cooperation and coordination with our European partners,” Sjoerdsma told the FD.

The move comes as the government tries to limit US influence in other areas. In late May it blocked a US takeover of Solvinity, the Dutch company that runs the DigiD login system, fearing that US law could be used to reach data held in the Netherlands.

By presenting itself as a reliable partner on technological security, the cabinet hopes to convince Congress that ASML’s existing restrictions are already enough and that a full ban would do more harm than good. The MATCH Act has cleared a committee but has not yet passed the full Congress.

US-Dutch tensions
The trip came days after ASML denied a US accusation that one of its most advanced machines had reached China in breach of export controls – a claim for which no evidence has been made public.

What is at stake if servicing is cut became clear last year, when China blocked exports of chips made by Nexperia and carmakers around the world faced shortages within weeks. Halting maintenance of ASML machines in China could stall a large part of global chip production in a similar way.

Asked about the Solvinity decision, Sjoerdsma said the US ambassador’s reported concerns had not come up during his visit.