By Toby Sterling
AMSTERDAM (Reuters) - ASML Holding NV's exports to mainland China will likely hold at last year's level in 2023 despite ongoing U.S-Dutch government talks over new restrictions on the company's sales to the country, CEO Peter Wennink said on Wednesday.
ASML, which dominates the market for machines used in one step of the chipmaking process, was restricted from selling its most advanced EUV machines to Chinese customers in 2019 following U.S. pressure, due to fears they could be used to make chips that have military applications.
The company still sends older DUV machines to China, although these are now a focus of the U.S.-Dutch talks. Such sales totalled around 2.16 billion euros ($2.35 billion), or 14% of total revenue, last year, down marginally from 2.17 billion in 2021.
In an interview with Reuters following the company's fourth quarter earnings, Wennink said he expected sales to China to be "about the same" this year, adding that orders from Chinese firms make up about 15% of the company's 40 billion euro order backlog.
The EUV machines account for 50% of ASML's sales, Wennink said, noting that the company's U.S. peers such as LAM Research and Applied Materials had not had similar restrictions imposed on their own sales to China until Washington announced sweeping new measures in October in a bid to hobble Beijing's chip-making ability.
After a meeting with U.S. President Joe Biden last week, Dutch Prime Minister Mark Rutte signalled that while the Netherlands is aligned with the U.S. on security policy, it will not simply adopt the new restrictions.
China is the world's biggest consumer of computer chips and Wennink said the first effect of the U.S. rules was to push local chipmakers to invest in capacity, albeit to make slightly less sophisticated chips.
"They just become very practical," he said, adding that Chinese customers are investing in 20 nanometre chips and larger - those considered cutting edge before the year 2014.
"This is an area where there is massive shortage."
($1 = 0.9175 euros)
(Reporting by Toby Sterling; Editing by Kirsten Donovan)