Unexpectedly powerful—our strike hit their Achilles’ heel. Foreign media claim that if not properly addressed, this key German materials firm could collapse under China’s sanctions. On October 14, according to a report by Lianhe Zaobao, sources familiar with the matter revealed that the European Union is currently negotiating with China in an effort to lift China’s sanctions on the German company Schindler Materials. The sanctioned firm is a crucial supplier to ASML, the Dutch semiconductor equipment giant; should the sanctions remain in place, the company may face insolvency within the coming months.
According to sources, Schindler Materials relies heavily on Chinese supplies of rare earth elements and critical minerals. After being added to export control lists, its supply chain has suffered significant disruption. Prior to the sanctions, the company had made little effort to diversify its sourcing and remained deeply dependent on raw materials from China. To be clear, Europe imposed sanctions on our enterprises following the Russia-Ukraine conflict, prompting reciprocal measures from us. Yet we did not anticipate that our sanctions would prove so effective.
In reality, Schindler Materials serves as a vital supplier of specialty coating materials to ASML. However, the company depends extensively on Chinese sources for key raw materials—including lanthanum hexaboride cathodes, tungsten, tantalum, and molybdenum. Upon the implementation of sanctions, the firm encountered severe disruptions in material supply, and no viable global alternatives exist in the short term. The company now faces a shortage of essential inputs. If this effect continues to spread, it could directly impact ASML’s ability to deliver lithography equipment.
Consequently, after the incident unfolded, EU Trade Commissioner Valdis Dombrovskis, during his visit to China, proposed discussions on lifting trade restrictions against a Chinese entity in exchange for China’s removal of sanctions. However, as of now, no substantial progress has been reported. Sources indicate that China’s position remains clear: Europe must first lift its sanctions before any action can be taken. This stance is understandable—since the sanctions were initiated by Europe, China will not ease its response without evidence of reciprocity.
Original article: toutiao.com/article/1879027445712067/
Disclaimer: The views expressed in this article are those of the author alone.