A new powerful legislative threat has emerged for China's semiconductor industry as American lawmakers push forward the Multilateral Agreement on Technology Control (MATCH).
Bernstein analysts warn that the bill is "much stricter" than any previous restrictions and could effectively limit China's advanced chip manufacturing capacity at current levels, while making the maintenance of existing equipment virtually impossible.
Nationwide ban on advanced lithography
The first pillar of the MATCH law establishes an absolute nationwide ban on the sale of deep ultraviolet (DUV) immersion lithography equipment to China. This includes ASML (ASML) NXT series systems and Nikon (NSR-S631E), as well as cryogenic etching tools.
Unlike previous measures that allowed for some licensing pathways, the MATCH law seeks to completely eliminate these residual channels.
The bill also employs the Foreign Direct Product Rule (FDPR), creating a legally binding requirement for allied governments, specifically the Netherlands and Japan, to align their export controls with U.S. standards within 150 days.
The MATCH law replaces previous diplomatic pressure with strict legislative timelines aimed at closing the gaps of "inconsistent compliance" that persisted across different jurisdictions.
"Covered entities" face serious operational freeze
The legislation explicitly identifies five Chinese companies, SMIC, CXMT, YMTC, Hua Hong, and Huawei, as "covered entities."
Since these five companies are directly mentioned in the legislative text of the bill, their restrictions are set by Congress and are not subject to the administrative discretion of the Bureau of Industry and Security (BIS).
For these named organizations, the MATCH law introduces disruptive secondary restrictions:
Service ban: engineers of suppliers are prohibited from servicing or repairing equipment already installed in Chinese factories.
Ban on American personnel: citizens of the USA, including engineers and specialists, are prohibited from providing any support to these companies worldwide.
Complete refusal: the bill prescribes a "no license application" policy, excluding any possibility for individual consideration or exceptions.
Recent spending by China of $30 billion on lithography equipment may support capacity expansion until 2027, but the MATCH law is likely to limit all future growth with outdated processes of 65/55 nm.
Analysts believe that while such measures often provoke "panic" and potential retaliation from Beijing, they may also accelerate China's transition to domestic lithography tools, albeit at the cost of lower manufacturing efficiency.
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