The Chinese Dongfang Jungyuan Electron software firm dismissed Saturday accusations about infringing the intellectual property of ASML Holdings.

The Chinese firm makes software for chip manufacturing procedures, while the Dutch one specializes in manufacturing lithography machines.

Chinese analysts have put ASML under fire for starting a "war of words" against a Chinese firm through its accusations while calling on the Dutch firm to take its issues to court if they have any legal standing.

"We have noted the recent emergence of a large number of internet reports related to our company, which are inconsistent with the facts, and we reserve the right to take any other legal actions against the relevant false information," Dongfang Jingyuan Electron.

The company, since its conception in 2014, has been in full compliance with Chinese laws and regulations, independently researching, developing, and innovating, as well as respecting and protecting intellectual property rights, it said in a statement.

ASML has said Wednesday Dongfang Jingyuan has been "actively marketing products in China that could potentially infringe" its intellectual property rights.

It also asked certain customers to boycott the Chinese firm, informing the relevant Chinese authorities of its concerns, though not providing any evidence to back their accusations.

Dutch ASML controls 90% of world lithography equipment market

ASML Holdings only highlighted the connection between Dongfang Jingyuani and a company it is associated with, XTAL Inc, who has lost a battle against the Dutch firm in 2019 in the United States.

It is not clear what the accusations are about altogether, though a tech analyst said it seems problematic for ASML, who controls about 90% of the world's lithography equipment market, not to use "normal, legal" means to protect its intellectual property". Instead, it is using the public opinion and its "monopolistic position" to pile up pressure on a rival.

Since 2014, Dongfang Jingyuan has obtained 145 domestic and foreign invention patents, 49 authorized invention patents, 14 software copyrights, and 15 registered trademarks.

Worldwide microchip shortage

The US went out on a limb to ban national firms from supplying Chinese ones with semiconductor-related tech and products, prompting China to establish its own market and overcome the US sanctions aimed at hindering its progress.

The largest chipmaker in China, Semiconductor Manufacturing International Corp (SMIC), is expanding its factories, which it said was going smoothly, adding that there were three projects upon whose completion its output would increase.

Despite the ongoing US crackdown, SMIC reported a record-high revenue of $1.61 billion in Q4 2021, a 53.8% year-on-year increase.

A shortage of microchips in manufacturing processes in the US cost the US economy $240 billion last year

Despite 2022 being SMIC's peak investment period, and its capital expenditure is expected to reach $5 billion, its development saw many difficulties as the US Commerce Department added it in December 2020 to its Entity List. The placement banned its access to advanced manufacturing equipment from US suppliers over alleged ties to the Chinese military.

The worldwide microchip shortage and high demand from local manufacturing created the perfect environment for the company.

According to analysts, a shortage of microchips in manufacturing processes in the US cost the US economy $240 billion last year, with electronics companies bearing the brunt of the impact.