Apple CEO Tim Cook met China’s Premier Li Qiang and other top officials as part of a trip to reaffirm the company's commitment to the market amid supply chain shifts and geopolitical uncertainties. Cook was part of a delegation of C-level executives and scholars from overseas attending the government-organized China Development Forum (CDF) in Beijing. Premier Li told the participants to the Forum that China is deeply integrated with the global system, and would continue to open up and provide a top-tier business environment despite changes in geopolitics. Cook also discussed with China's Minister of Commerce Wang Wentao Apple’s development in China and the stabilization of the industry supply chain. Wang confirmed in his meeting with Cook that the Chinese government is willing to provide a good environment and services to foreign companies including Apple. Cook’s trip to China, his first since the start of the Covid-19 pandemic, has been seen as a demonstration of the company’s commitment to the world’s biggest smartphone market amid economic decoupling risks and an ongoing supply chain shift. Apple and its contract manufacturers have been relocating some of their production lines out of mainland China to places such as Vietnam and India, following production disruptions at the biggest iPhone factory in Zhengzhou, Henan province last November, fueled by Covid-19 outbreaks. However, China remains a key market for the smartphone maker. The iPhone 13 was the bestselling smartphone in China in 2022 with a 6.6% market share. Apple was also the No 1 smartphone player in the fourth quarter, taking up 23.7% of the China market as it achieved its highest-ever quarterly share.
Peter Wennink, CEO of Dutch semiconductor equipment maker ASML, also visited China for talks with Commerce Minister Wang, who asked ASML to help to jointly safeguard the stability of global semiconductor industrial chains. Wennink’s China trip has been low profile and the meeting with Wang was the only publicly reported part of his visit. ASML's CEO did not make any speech or accept any Chinese state media interviews, highlighting the sensitivity of ASML’s position in Beijing’s chip development plans. ASML has a near-monopoly in the manufacture of advanced lithography machines, needed for the production of cutting-edge chips. The Dutch government has blocked ASML from selling its most advanced machines to customers in China, amid pressure from Washington, which wants to restrain China’s semiconductor progress on national security grounds.
ASML declined to comment on this week’s China visit by Wennink. Analysts said Wennink’s trip was unlikely to change the current state of affairs. “ASML considers China a very important market in Asia, and along with many European firms, it wants to focus on the business side,” said He Hui, Semiconductor Research Director at Omdia. “But in the current environment, they have to find a more balanced way for their development in China while reducing the political impact.” The Netherlands is currently mulling further restrictions on exports of chip technology to China, which would require ASML to apply for a license before shipping its deep ultraviolet (DUV) lithography systems to China, further impacting ASML’s business in its third-largest market. Alongside Japanese lithography producer Nikon and chip tool maker Tokyo Electron Limited, ASML is the most crucial company to the U.S.-led effort to curtail China’s advanced chip-making ambitions. The Dutch government is expected to introduce more restrictions in the summer while Japan is set to make a move in April, the South China Morning Post reports.
Sales of ArF immersion DUV machines accounted for 34 per cent of ASML’s total system revenue of €15.4 billion in 2022, compared with a 36% share in 2021. The company’s EUV sales, meanwhile, accounted for 46% of total system sales in both 2021 and 2022, according to ASML’s results for the December quarter.
