Japan Joins US, Netherlands, In Chip Export Restrictions To China

The last key country that can deliver semiconductor manufacturing equipment, has confirmed it will also restrict the export of the equipment going forward.

According to Reuters, Japan on Friday announced it will restrict exports of 23 types of semiconductor manufacturing equipment – as it joins the US push to hamper Beijing’s ability to ramp up its domestic chip industry, which is being used to enhance the military capabilities of China.

The US had announced its sweeping export controls for semiconductor manufacturing equipment in October 2022, and the Netherlands had announced in early March that it too would restrict the export of the chip making kit to China.

Japanese announcement

The US, the Netherlands and Japan are the only three countries that are home to manufacturers of advanced machines to print microchips.

The Netherlands of course is home to ASML Holding, which dominates the market for lithography systems used to create chips’ minute circuitry.

Japan meanwhile is home to major chip equipment makers such as Nikon and Tokyo Electron.

Reuters noted that Japan did not single out China as the target of the restrictions, saying manufacturers would need to seek export permission for all regions.

“We are fulfilling our responsibility as a technological nation to contribute to international peace and stability,” Minister for Economy, Trade and Industry Yasutoshi Nishimura was quoted as telling a news conference.

Japan wants to stop its advanced technology being used for military purposes and does not have a specific country in mind, he reportedly said.

But there is little doubt that China is the country in question, which should make the weekend visit to Beijing by Japanese Minister for Foreign Affairs Yoshimasa Hayashi a tad difficult.

Effective from July, Japan will impose export controls on six categories of equipment used in chip manufacturing, including cleaning, deposition, lithography and etching.

China response

The Japanese export restrictions will also be seen as a major win for US Biden Administration, after it had announced sweeping restrictions last October on access to chipmaking technology to slow China’s technological and military advances.

China, of course, is not happy at the development.

“Politicising, instrumentalising and weaponising economic and technological issues, and artificially disrupting the stability of global production and supply chains will only harm others and harm themselves,” Chinese foreign ministry spokesperson Mao Ning was quoted as saying at a briefing when asked about Japan’s new export rules.

The US had needed the co-operation of industry heavyweights Japan and the Netherlands for its measures to be effective and to ensure its companies do not face a competitive disadvantage, Reuters noted.

Those two countries in January had agreed to join the US in restricting exports to China of equipment that could be used to manufacture sub-14 nanometre chips, but did not announce the pact in order to avoid provoking China, sources previously told Reuters.

Going forward, China will no longer be able to access advanced chip making equipment, and will have to rely on its domestic capabilities to bolster advanced chip production.

ASML recently revealed that it had suffered a data theft of its IP – by a former employee located in China.

It is understood that the data that was misappropriated involved documents.