This is John Batchler, a conversation with Jack Burnham of the Foundation for Defense of Democracies

about stories of China's independence in chipmaking, not so independent, integrated into the worldwide system of chipmaking,

except the bad actors in China have made restrictions necessary. One of those restrictions has to do with the highest in lithography equipment that's made by a firm in Europe, ASML.

The Chinese who no longer have access to buy the highest in lithography the way the U.S. does, and other countries do.

Why? Well, that's their problem. The question is,

what is to be done, and what they do is they go through and around and indifferent to the regulations,

the sanctions. They find a way. Chinese firms, SML, the two together again, illicitly, but there it is. That's how competition works.

And China's idea of being independent is the heart of the folly. If they would just join the rest of us, they could buy as much equipment

as they want instead of standing back as if behind a wall. There's Jack to explain how it works.

It's not whole. It's not organized. It's where we are. More tonight.

It's a good question.

So both the Chinese domestic semiconductor manufacturing is largely reliant on components,

particularly from ASML.

And much of the, not only just China, but much of the semiconductor manufacturing is done using

ASML components.

And so, yes, there are plenty of stories, particularly prior to the Biden administration

imposing the first round of export controls on semiconductor manufacturing equipment that companies like

Smec and other Chinese firms tried to stockpile as many ASML products as they could.

And given the fact that these products were bought prior to the ban and that some of these bands

were not necessarily retroactive,

that yes, ASML employees would, at least for a time, would service the equipment that had

already been sold. So this is a major problem, is that you have Chinese companies that are

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