ASML, KLA fall after US House panel calls out industry for sales to China's military-linked companies

 Semiconductor companies including Applied Materials Inc. and ASML Holding NV fell after a US House committee said that the industry was boosting China’s semiconductor industry and supporting its military, raising the specter of further export controls.

Applied Materials, ASML, Tokyo Electron Ltd., KLA Corp. and Lam Research Corp. “made sizable returns selling equipment to Chinese state-owned and military-linked companies,” the House China panel said on Tuesday, citing the companies’ sales data. There is no claim that any tool maker has violated US, Dutch or Japanese law.

The committee called on President Donald Trump’s administration to “dramatically expand country-wide bans and licensing requirements” on tool exports to China. It has no power to impose those restrictions itself and the US Commerce Department doesn’t have to follow its recommendations, but the call to action raised fears that further export bans are in train.

The semiconductor industry has been a major target as tensions between China and the US ramp up, with the American government requiring greater restrictions on exports from the US and its allies. Last month the US scrapped Biden-era authorizations that have allowed ASML customers Samsung Electronics Co., SK Hynix Inc. and Taiwan Semiconductor Manufacturing Co. to get supplies to Chinese factories without seeking Washington’s permission each time.

China’s advance in manufacturing chips “poses threats” to US national security, the panel said. It accused the toolmakers of selling directly to entities known to both produce chips for the Chinese military, and of supporting China’s efforts to build a chip making industry.

ASML is the world’s only producer of cutting-edge lithography machines needed to produce high-end chips used in everything from electric vehicles to military gear. The Dutch company has never been able to sell its most advanced machines to China because of US-led export restrictions.

https://finance.yahoo.com/news/asml-shares-fall-us-house-083143843.html