A secret agreement between the U.S. and the Netherlands last year to limit ASML’s deliveries to China didn’t stop a surge in sales of its sensitive chipmaking equipment.
The deal, which hasn’t been reported before, stumbled as ASML turned to Beijing to compensate for weak demand elsewhere. The Dutch government permitted more shipments, allowing China to stock up on the gear before new U.S.-brokered export restrictions came into force this month.
Originally intended as a stopgap before those restrictions took effect, the agreement was meant to give priority to shipments of the company’s immersion deep ultraviolet lithography machines to markets outside of China, according to people familiar with the deal who spoke on condition of anonymity.