AI Chip Wars

brencronin
20 hours ago
4 min read

I came across a post last week about the Netherlands passing a tougher espionage law, and it really struck a nerve. You can't help but wonder, how much of this move is rooted in the fear of losing their national treasure, ASML, to Chinese espionage? Of all the technologies in the world, ASML’s chipmaking capabilities are likely the one China wants more than any other!

ASML and the Lithography Ecosystem

ASML sits at the heart of the semiconductor world, producing the most advanced lithography machines, equipment essential for etching the ultra-fine patterns that define modern logic and memory chips. These machines determine how small and densely transistors can be packed, directly influencing the power, speed, and efficiency of every modern device.

Headquartered in the Netherlands, ASML holds a near-monopoly on cutting-edge lithography, particularly extreme ultraviolet (EUV) systems, technology so complex that it's often described as the most advanced machinery ever built. The company was founded in 1984 as a joint venture between ASM and Philips, originally considering the name "ALS" (Automated Lithography Stepper) before wisely rebranding to avoid negative associations with the disease of the same acronym.

ASML’s pivotal role and its journey from startup to global linchpin in the chip supply chain is explored in Focus: The ASML Way – Inside the Power Struggle Over the Most Complex Machine on Earth by Mark Hijink, a must-read for anyone seeking to understand the geopolitical and technological stakes behind the world's most advanced chips.

The Most Complex Machine on Earth and the EUV Chip Manufacturing Evolution

During lithography, wafers are coated with a light-sensitive photoresist and exposed to intense light, either Deep Ultraviolet (DUV) or the more advanced Extreme Ultraviolet (EUV), through a reticle, which contains the blueprint of the circuit. Advanced optics shrink and project this pattern onto the wafer with extreme precision. The exposure chemically alters the resist layer, transferring the pattern to the wafer. EUV lithography has ushered in a new era for the semiconductor industry by dramatically increasing patterning resolution. This technology enables the creation of chips with smaller, more energy-efficient transistors, crucial for powering everything from smartphones to AI workloads.

The current cutting edge is now High-NA EUV (Numerical Aperture), which enhances resolution even further. Research is already underway into Hyper-NA EUV, which aims to push the boundaries of Moore’s Law even deeper into the sub-nanometer regime.

ASML’s dominance and the loss of United States lithography

ASML’s dominance and the loss of United States lithography capabilities was cemented through forward think innovations, and key acquisitions, most notably in 2001, when it purchased Silicon Valley Group (SVG) a US based company, which had earlier acquired the Perkin-Elmer lithography division which pioneered projection lithography, which replaced the defect-prone contact methods of the 1970s. The Perkin Elmer Micralign scanner projected light through a mask without physically touching the wafer, greatly improving chip yields and reliability. This marked a significant shift in chip manufacturing.

The foundations of today’s cutting-edge extreme ultraviolet (EUV) lithography were laid in the 1980s through collaborative research efforts between scientists in the United States and the Netherlands. ASML ultimately succeeded in commercializing EUV technology by 2010, transforming decades of research into one of the most advanced tools in semiconductor manufacturing.

One of the most critical breakthroughs in making EUV lithography viable was the ability to generate EUV light in a stable, repeatable way. ASML achieved this in collaboration with two key partners: Cymer, a San Diego-based company later acquired by ASML, and ZEISS, its long-standing optics partner. To understand the challenge, consider this, EUV light occurs naturally only in extreme environments, such as the Sun’s corona. To recreate it on Earth, Cymer engineered a process where a high-powered laser strikes droplets of molten tin, generating a plasma that burns hotter than the surface of the Sun. This plasma then emits light in the extreme ultraviolet spectrum, enabling the next generation of semiconductor manufacturing.

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Although headquartered in the Netherlands, ASML maintains a major R&D footprint in the United States, most notably in Wilton, Connecticut. This U.S. center, together with ASML’s key optical partner ZEISS in Germany, continues to drive innovation at the frontier of chip lithography, underscoring the deeply international nature of this technological breakthrough.

China’s Drive to Break the Lithography Barrier

Cut off from acquiring extreme ultraviolet (EUV) lithography systems due to U.S.-led export restrictions, China has responded with a high-stakes push to build its own capabilities. Backed by over $40 billion in state funding and efforts from domestic firms like SiCarrier, China is urgently working to bridge the gap in what is arguably one of the most strategically vital technologies of AI chipmaking.

But this drive hasn't been limited to funding alone. China has also turned to industrial espionage as a parallel path to advancement. ASML, holder of the world’s most advanced lithography technology, has reported thousands of security incidents annually, including multiple high-profile cases where former employees illicitly transferred proprietary data directly to Chinese firms. These repeated breaches underscore just how far China is willing to go to gain access to the crown jewel of chip manufacturing.