HANOI/AMSTERDAM, March 10 (Reuters) – Suppliers to Dutch chip-making machinery giant ASML Holding NV (ASML.AS) are planning to build factories in Southeast Asia rather than China amid tensions policies between Beijing and the West, according to two sources and documents consulted by Reuters.
Officials from a dozen tech companies are expected to travel to Vietnam, Malaysia and Singapore next week, according to a note from the Brabant Development Agency, a Dutch public body involved in organizing the trip.
“Majority of companies (join) because they plan to expand/set up production sites in Vietnam or Malaysia,” says the memo prepared by the agency in conjunction with Brainport Industries, which represents 200 companies in high-tech manufacturing based near the Netherlands. city of Eindhoven.
The possible investments are part of a broader, long-term strategy to reduce exposure to China, two people familiar with the plan told Reuters.
See 2 more stories
The dozen or so companies on assignment are nearly all contractors to ASML, one of the world’s leading suppliers to semiconductor makers such as TSMC, Samsung (005930.KS) and Intel (INTC.O). Some have production facilities in China.
The Dutch government has never granted ASML a license to sell its most advanced machines to customers in China, following pressure from Washington, which seeks to hamper China’s ability to manufacture its own advanced computer chips and slow its military advances.
ASML’s lithography systems can cost up to 160 million euros ($170 million) each and are used to create the circuits for computer chips.
The Dutch government announced new restrictions on Wednesday
on exports affecting ASML’s second-best line of chip printing tools, which could lead to Chinese retaliation.
SINGAPORE HEAD OFFICE?
Among the companies on assignment is Neways, which helps ASML develop electrical control units, power drives and wiring systems for lithography systems, according to the company’s website.
Neways was not immediately available for comment.
ASML supplier NTS Group, which is a supplier of precision mechanics tools, is another company that will join the business trip, Brainport said.
The other travel companies are Bestronics, AAE BV, BKB Precision, HQ Group, KMWE Group, Sempro, Sioux Technologies and VDL ETG, according to one of the documents and Brainport. The companies could not immediately be reached for comment on Friday.
Singapore is considered a potential location for the regional headquarters, the memo says.
A spokesperson for ASML said its suppliers’ decisions about production sites are up to them.
A person familiar with organizing the trip said one of the companies was in advanced talks with partners in Vietnam to build a factory.
A second company was also likely to invest there, the person said he declined to name the companies and to be named because the information was confidential.
A second person involved in organizing the trip said Malaysia was also a likely choice for further investment as some of the companies already have facilities there.
($1 = 0.9398 euros)
Reporting by Francesco Guarascio in Hanoi and Toby Sterling in Amsterdam; Editing by Emelia Sithole-Matarise @fraguarascio
Our standards: The Thomson Reuters Trust Principles.