The 5nm tech will be used to produce chips for Huawei's new smartphones, and, if successful, could also be used for its AI chips

The machines are aimed at disrupting the most expensive step in the chipmaking process, by “stamping” chip designs on to silicon wafers instead of etching them using ultraviolet light

"We are deeply concerned by the direct involvement of the United States in interferring with the export of lithography machines by Dutch companies to China," a commerce ministry spokesperson said

ASML detailed the chip technology theft, which happened in 2022, in part of its annual report in February this year

The chief of one of the world’s biggest chip equipment-makers, ASML, said isolating China completely will ‘force’ the country to ramp up innovation

The company said it will continue to ship the products in its NXT:2000i and more advanced DUV models, which fell under the restrictions that started on Friday

The rules, set to come into effect on September 1, will require Dutch companies that make advanced chipmaking equipment to seek a licence before they can export it

The development follows the Dutch government’s announcement that it would restrict exports of critical chipmaking technology to protect national security

For Chinese customers, the restrictions would mean “that their ability to pursue leading-edge nodes development will be significantly curtailed," Citi analyst Amit Harchandani said

The Netherlands considers it necessary on national security grounds to get this technology into oversight with the greatest of speed, the Dutch trade minister said

The Netherlands will restrict ASML from selling advanced chimaking equipment to China, while Japan would impose similar restrictions on Nikon Corp, media reports said

If the two sides can agree on the details, a deal could be announced as soon as Friday, two sources have said