The Dutch government has ordered ASML to restrict the shipment of some of its chip-making equipment to China, the company said on Monday. The Veldhoven-based ASML announced that the Dutch government has lately partially canceled a license for the export of its NXT: 2050i and NXT: 2100i lithography systems in 2023.

Shares of ASML closed 2.6% lower on Tuesday. 

Lithography devices, which is essential to the chip-making process, is sold by ASML. Extreme ultraviolet (EUV) lithography machines are one kind of equipment it supplies; these are used to create the highest-quality chips available, including the ones used in Apple iPhones. 

The United States has been pressuring the Dutch government to restrict chip exports to China for a number of years.

In its statement on Monday, the company said that after discussions with the US government, it has “obtained further clarification of the scope and impact of the US export control regulations.”

When contacted by media, a spokesperson for the Dutch Ministry of Foreign Affairs did not immediately provide a comment.

Experts have noted ASML’s market domination as a sign of the developing gulf between China and the West over access to modern technology. 

The shipping license was revoked in response to the U.S. government’s October tightening of export restrictions on sophisticated semiconductors and equipment used to make chips to China, which expanded upon earlier regulations. But it does not “expect the current revocation of our export license or the latest US export control restrictions to have a material impact on our financial outlook for 2023,” ASML added.

China reacted on Tuesday by calling the US curbs “hegemonic” and “bullying.” 

These actions will “undermine the global semiconductor landscape,” Foreign Ministry spokesperson Wang Wenbin said. “It will only backfire against the US.”

He also urged the Netherlands to “protect the common interests of businesses from both countries with concrete action” and ensure a “non-discriminatory business environment.” 

The company has previously said it expects fourth-quarter net sales of between 6.7 billion euros and 7.1 billion euros ($7.34 billion and 7.78 billion).