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Rewrite the China and cost objections on the Dutch Pause Button page #1117

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joepio merged 1 commit into from
Sep 14, 2026
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Rewrite the China and cost objections on the Dutch Pause Button page #1117

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21 changes: 13 additions & 8 deletions src/posts/asml-pause-button.md
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Expand Up @@ -169,8 +169,13 @@ The EU's [Anti-Coercion Instrument](https://iep.unibocconi.eu/why-asml-eus-most-
And as Hurst argues, even under retaliation Europe does not fall further behind, because the whole race slows down.

**China will catch up, so the lever will become worthless.**
That is an argument for speed, not for waiting.
EUV remains the only path to the newest nodes for years to come, and SMIC's multi-patterning has low yields.
Not soon.
China's first domestically built immersion DUV tool, delivered in 2026 at about [five units a year](https://asiatimes.com/2026/07/chinas-duv-lithography-still-lags-asml-by-four-generations/), matches an ASML machine from 2008, still imports 70% of its components, and has not yet run in a commercial fab.
The Shenzhen EUV prototype that Reuters revealed in December 2025 [produces light but no chips](https://www.engadget.com/big-tech/china-reportedly-has-a-prototype-euv-machine-built-by-ex-asml-employees-235833756.html), with 2030 as the insiders' own target.
A [June 2026 forecast](https://blog.aifutures.org/p/a-forecast-of-chinese-duv-and-euv) puts commercial-scale Chinese DUV for 7nm in the mid-2030s and EUV for 5nm in the late 2030s.
Until then, China's advanced chips come off [several hundred ASML DUV machines](https://www.aei.org/research-products/report/the-lithography-loophole-how-china-is-printing-its-way-to-chip-self-sufficiency/) that ASML services roughly every six months, with 5nm yields [as low as 20%](https://www.aei.org/research-products/report/the-lithography-loophole-how-china-is-printing-its-way-to-chip-self-sufficiency/) and costs 40 to 50% above TSMC's.
So the lever reaches China too, for years rather than months, though AI itself could shorten that.
That is a window, not a permanent condition, which is the argument for using it now.

**A unilateral Dutch pause does not work.**
Correct, for a blunt export stop.
Expand All @@ -180,14 +185,14 @@ What slows down is the exponential growth.
The Netherlands supplies the enforcement module, not the whole solution.

**It will cost ASML billions and the Netherlands jobs.**
ASML has [44,000 employees in the Netherlands](https://www.talosnetwork.org/perspectives/boosting-the-eus-position-in-ai-through-third-places-diplomacy-9ym5d) and €16 billion in supplier spending.
Non-AI demand stays.
The [AI Policy Bulletin](https://www.aipolicybulletin.org/articles/bargaining-chips-could-the-eu-leverage-asml-to-influence-u-s-ai-policy) and Talos Network both propose a compensation fund, which belongs in this proposal.
For comparison: the MATCH Act would hit [about a fifth](https://www.dutchnews.nl/2026/06/netherlands-joins-us-chip-pact-while-fighting-asml-export-curbs/) of ASML's expected 2026 revenue, and the Dutch government treats that as unavoidable.
That assumes an export stop, which is not what we're proposing.
With our proposal, the cost falls on whoever refuses it: a fab that registers its output and admits inspectors keeps buying machines.
ASML already cannot meet demand, so a cap on AI-bound tools shifts orders rather than cancelling them, and service revenue from installed machines continues.
The comparison is not with zero but with the MATCH Act, which would hit [about a fifth](https://www.dutchnews.nl/2026/06/netherlands-joins-us-chip-pact-while-fighting-asml-export-curbs/) of ASML's expected 2026 revenue and which the Dutch government already treats as unavoidable.
Where there is real cost, a compensation fund belongs in the proposal; the Netherlands put [€2.5 billion](https://www.france24.com/en/live-news/20240328-operation-beethoven-dutch-2-5bn-euro-charm-offensive-to-keep-asml) into the Eindhoven region in 2024 to keep ASML, so the precedent exists.

**Export controls always fail.**
[Tim Worstall](https://www.timworstall.com/2026/09/weird-weird-ideas/) made this argument in response to the Guardian piece.
But the EUV ban on China has held since 2019, and the [Institute for AI Policy and Strategy](https://www.iaps.ai/research/semiconductor-manufacturing-equipment-export-controls) calls it largely effective.
The EUV ban on China has held since 2019, and the [Institute for AI Policy and Strategy](https://www.iaps.ai/research/semiconductor-manufacturing-equipment-export-controls) calls it largely effective.
What fails are controls without a maintenance ban and without allies.
Both are in this proposal.

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