VELDHOVEN, Netherlands, Jan 23 (Reuters) - Chinese demand for semiconductor manufacturing equipment has not slackened, despite a slowdown in the country’s economic growth and trade frictions with the United States, the chief executive of toolmaker ASML Holding NV told Reuters on Wednesday.
“We had about 1.7 billion (euros) of sales there last year, and this year is going to be about equally strong” Peter Wennink said in an interview.
“That is a trend that will continue. They will not stop, the Chinese will not back down, not back off, and we as a supplier will keep shipping.” he said. “The Chinese semiconductor industry is just at the beginning.”
Wennink predicted the Chinese mainland market would thrive for years to come, as the government has made it a priority to become more self-sufficient in semiconductor chips.
While China processes more than half the world’s computer chips, assembling them and putting them in devices like mobile phones, its share in manufacturing remains small compared with that of South Korea and Taiwan.
“Their import of chips is higher than their import of oil,” Wennink said.
ASML, which has a near-monopoly on “lithography systems” used to trace out the circuitry of cutting edge chips, earlier on Wednesday said some customers were pushing orders back amid weakness in the memory chip market.
ASML serves all major chipmakers. Its biggest clients are Samsung, TSMC and Intel.
Wennink said mainland Chinese manufacturers wanted to build leading-edge chips at volume, but that remained an ambition more than a reality.
He said no company in China had yet installed one of ASML’s most advanced EUV machines, which cost around 100 million euros ($114 million) apiece.
“They don’t have an EUV machine, they have an order for an EUV machine,” he said, referring to a customer whose identity ASML has not disclosed but is widely believed in the industry to be Semiconductor Manufacturing International.
Wennink said a number of Chinese chipmakers were trying to scale up production to commercially viable levels.
“That will start to accelerate from 2020,” he said, adding ASML needed to be there “now” to start the process of delivering and installing its machines, which are one of the largest pieces of equipment in a fabrication plant.
Wennink said so far the trade dispute between the United States and China had not impacted ASML, which is based in the Netherlands.
It faces no limitations on shipping its machines to China, as they are built with fewer than 25 percent American parts - but it must obtain licences from Dutch authorities, which have until now been granted.
But Wennink said he was concerned about the possibility the trade war could escalate.
He noted the entire chain of semiconductor production was global and both its supply chains and end customers of electronics devices were located in all parts of Europe, the United States and Asia.
“It’s up to the politicians to use their senses and say ‘let’s make sure that we don’t kill this ecosystem that’s providing so much value for the entire world’,” he said.
$1 = 0.8797 euros Reporting by Toby Sterling; Editing by Mark Potter