Japan, Netherlands ‘Join US China Chip Sanctions’

The US administration has reportedly reached a deal with the Netherlands and Japanese governments to place additional restrictions on exporting advanced chipmaking equipment to China, following months of negotiations.

The Netherlands’ ASML, a leader in the market, said it understood a deal had been reached but cautioned that implementation would “take time”.

Based on comments from government officials and its understanding of the timeline, ASML said it did “not expect these measures to have a material effect on the expectations that we have published for 2023”.

In Japan the controls would affect companies such as Nikon and Tokyo Electron.

Export controls

The agreement comes after US president Joe Biden met separately with Japanese prime minister Fumio Kishida and Dutch prime minister Mark Rutte earlier this month.

The White House’s National Security Council said Dutch and Japanese officials were in Washington, DC for talks with Biden national security adviser Jake Sullivan covering the “safety and security of emerging technologies”.

Rutte said in a press conference last week that any agreement would be communicated to the public in a “very limited way” due to the “sensitive” nature of the subject matter.

The US announced its latest round of export controls in October, affecting domestic semiconductor equipment manufacturers such as Applied Materials, Lam Research and KLA.

Those companies said they were concerned they would lose market share if competitors in countries such as the Netherlands and Japan faced no similar controls.

Technology risk

China has been building up its chip industry in recent years to reduce its dependence upon the West, but the US argues the trend presents a national security risk.

The Netherlands is to prevent ASML from exporting to China at least some immersion lithography machines, the most advanced equipment in the company’s deep ultraviolet lithography line, while Japan is to place similar restrictions on Nikon, Bloomberg reported, citing unnamed sources.

ASML said it understood that “steps have been made towards an agreement between governments which, to our understanding, will be focused on advanced chip manufacturing technology, including but not limited to advanced lithography tools.

“Before it will come into effect it has to be detailed out and implemented into legislation which will take time,” the company added.