ASML Holding NV has extended a deal to sell chip manufacturing equipment to Semiconductor Manufacturing International Corp. (SMIC), China’s largest chipmaker, until the end of this year, the Dutch firm said in a statement Wednesday.

ASML made the statement after SMIC disclosed Wednesday a volume purchase agreement under which it has already spent US$1.2 billion with ASML.

In a clarifying statement issued several hours later, ASML said the agreement began in 2018 and was slated to expire at the end of 2020, but the two companies agreed in February to extend the deal to the end of this year.

In December, SMIC was one of dozens of firms put on a U.S. blacklist that required American semiconductor manufacturing equipment firms such as Applied Materials Inc. and Lam Research Corp. to obtain a license before exporting products to the chipmaker.

ASML, which is based in the Netherlands and is the world’s largest supplier of lithography equipment for making chips, produces a critical tool required to manufacture advanced chips: an extreme ultraviolet lithography (EUV) machine.

In 2019, the Trump administration pressed Dutch officials to cancel a sale of an EUV machine to SMIC. At that time, Dutch officials declined to renew a license needed to ship the tool. Dutch officials had not approved a license to ship an EUV tool to China as of late February, according to government records.

In its statement Wednesday, ASML said the volume purchase deal with SMIC related to an older technology called deep ultraviolet lithography (DUV).

In January, ASML CEO Peter Wennik said the company could see “significant upside” selling older chipmaking technology to China if allowed by government officials to do so. China accounted for 17 percent of ASML’s 2020 sales.

(SD-Agencies)