Netherlands, Japan say they will join U.S. in restricting China’s access to chip technology

WASHINGTON — The Netherlands and Japan, two of the world’s most advanced makers of semiconductor manufacturing equipment, agreed on Friday to join the United States in banning exports of some of the highest-tech machinery to China, people familiar with the matter said. .

The agreement, reached after a high-level meeting in Washington with U.S. national security officials, will help expand the scope of sweeping restrictions on the kinds of semiconductor technology that could be shared with China that the Biden administration issued unilaterally in October.

The countries have not publicly announced the deal because its sensitivities and details are unclear. But the deal appears likely to put the two countries’ tech industries on a more equal footing, preventing Japanese and Dutch firms from scrambling for market share in China that is being relinquished by U.S. companies. U.S. companies say that possibility puts them at a disadvantage.

The White House and the Dutch government declined to comment. The Japanese government did not immediately respond to a request for comment.

The United States in October imposed tight controls on sales to China of semiconductors and the machines used to make them, arguing that Beijing could use the technology for military purposes, such as cracking U.S. codes or guiding hypersonic missiles. But even before those restrictions were issued, the United States had been pressuring the Netherlands and Japan to further limit exports of advanced technology to China.

The October rules also restricted certain exports to China from countries other than the United States. The Biden administration is using a new rule called the foreign direct product rule that prohibits companies that use U.S. technology, software or inputs from selling certain advanced semiconductors to China. But those measures only apply to chips, not the machines that make them.

Instead, the White House has continued to press allies to pass restrictions that limit the sale of semiconductor manufacturing equipment by firms such as Dutch firm ASML or Japan’s Tokyo Electron. The White House argues that the sale of such advanced machines to China creates a danger that Beijing may one day produce its own versions of advanced products that it can no longer buy from the United States.

Negotiations that may continue must overcome commercial and logistical issues. Emily Benson, a senior fellow at the Center for Strategic and International Relations, a Washington think tank, said that like Americans, the Dutch and Japanese worry that if they withdraw from the Chinese market, foreign competitors will take their place. Over time, this “could affect their ability to maintain a technological advantage over competitors,” she said.

The Dutch government has banned the sale of its most advanced semiconductor machines, extreme ultraviolet lithography systems, to China. But the U.S. encouraged the Dutch to also limit a slightly less advanced system called deep ultraviolet lithography.

Governments also face questions about whether they have the legal authority to issue restrictions, as the U.S. does, and a broad technical discussion about which technologies to restrict. Japan and the Netherlands may still need some time to amend their laws and regulations to implement the new restrictions, she said. Benson added that it could take months or years for the restrictions in the three countries to mirror each other.

Source link