[News Figures] "Politics Is Not Our Role" ASML's New Chief Caught Between the US and China

Christophe Puech CEO Interview with WSJ
Appointed in April... "Geopolitics Suddenly Became Important"
Opposes Restrictions on China... "The More You Block, The More They Unite"

"Our role is not to engage in politics. It is not to decide what is right or wrong."

Christoph de Vries, CEO of Dutch semiconductor equipment company ASML, said this in a recent interview with The Wall Street Journal (WSJ). He is the head of ASML, which has become the "shrimp" caught in the "whale fight" between the superpowers of the United States and China over semiconductor supremacy. As the world's only company producing extreme ultraviolet (EUV) lithography equipment essential for advanced semiconductor manufacturing, ASML is called a "super second-tier" player in the industry, but this influence also makes business challenging.

Christoph Pueke, CEO of ASML (Photo by ASML website)

The 51-year-old Frenchman de Vries took office as ASML's CEO on April 25. He began a four-year term following former CEO Peter Wennink and Chief Technology Officer (CTO) Martin van den Brink. Amid the intensifying semiconductor supremacy war among major countries triggered by the COVID-19 pandemic in 2020, the leadership change at ASML, which has been balancing between the U.S. and China, became an issue that attracted global attention.

De Vries, a semiconductor industry veteran with a master's degree in physics, joined ASML in 2008 as a marketing and product management executive. He joined ASML's board in 2018 as Vice President in charge of EUV technology. In 2022, he served as Chief Business Officer (CBO). Around that time, he was offered the next CEO position by former CEO Wennink and others and underwent a two-year succession process.

As CEO, de Vries is focusing on walking a tightrope between the U.S. and China. The U.S., aiming to curb China's semiconductor rise, is trying to restrict ASML's advanced equipment from being imported into China. The Dutch government has been mobilized to block ASML's exports to China, and through U.S. restrictions, equipment above certain technological thresholds cannot be sold to China. For ASML, giving up the large Chinese market is an issue that impacts sales.

Christoph Pueke, ASML CEO (center in the photo), Peter Wennink, former CEO (right in the photo), and Mahtung Vandenbrink, Chief Technology Officer (CTO) (Photo by CEO Pueke's SNS)

De Vries expressed to WSJ that he hopes to remain as low-profile as possible while being very cautious not to let the technology become entangled with politics.

He said that for a long time, ASML had not worried about political constraints related to equipment sales, but "suddenly, geopolitics has become one of the most important factors worldwide." He added that policymakers' fear of China and lack of understanding of the semiconductor industry have led to some misguided policy decisions, and ASML tries to respond by explaining its technology and possible consequences of restrictions to policymakers.

De Vries warned that U.S. restrictions on semiconductor equipment to China could have unintended consequences. Rather than blocking China's advanced semiconductor production, it makes it difficult for ASML to understand how its equipment operates inside China and could spur China to develop its own equipment. He pointed out, "The more restrictions there are, the more people are driven to unite tightly."

Another challenge for de Vries is ASML's next product development. Although ASML currently dominates the semiconductor equipment market with EUV equipment and holds the title of "super second-tier," questions are quietly emerging in the market about whether it can maintain this dominance. Simon Coles, an analyst at Barclays, said, "ASML currently has the most advanced equipment in the world, but people are asking, 'What is the next product?'"

Last month, TSMC CEO Wayzarja visited ASML's headquarters in the Netherlands, where ASML CEO Christophe Fouquet guided him, followed by a commemorative photo session. (Photo by CEO Fouquet's SNS)

The new product ASML is currently selling, the High-NA EUV, is exclusively sold by ASML. It is equipment that global semiconductor manufacturers are eager to adopt for producing semiconductors below 2 nanometers (nm; 1 nanometer is one-billionth of a meter). The High-NA EUV equipment reportedly costs 350 million euros per unit, more than twice the price of existing EUV equipment.

Intel has already secured one unit of this equipment, and TSMC recently decided to purchase this product as well. TSMC had previously declared it would produce 2nm products using older-generation EUV equipment, citing the new equipment's high cost, but after TSMC CEO Wei Zhejia visited ASML headquarters and received explanations about the new product, the company changed its stance.

ASML announced it is developing Hyper-NA EUV equipment following the High-NA EUV. However, de Vries expressed that customers are unlikely to need this equipment for several years. He predicted that since global semiconductor companies have just started competing to secure the High-NA EUV equipment, it will take several more years before the next-generation equipment is needed.

De Vries, the head of ASML, a company attracting worldwide attention, is a father of six children. He told WSJ that he often loses sleep caring for his youngest daughter, who was born seven months ago. A family-oriented husband, de Vries said he would never have accepted the CEO position two years ago without his wife's consent, and he accepted the role only after obtaining her approval.

Meanwhile, ASML recently surpassed French luxury brand LVMH to become the second-largest company by market capitalization on the European stock exchange. The only company with a larger market cap than ASML in Europe is Danish pharmaceutical company Novo Nordisk, famous for its obesity treatment drug Wegovy.