After years of lobbying from Washington, Japan and the Netherlands agreed on Friday to tighten restrictions on the export of chip-making technology to Chinese companies. The news of the deal was reported bY Bloombergthe financial timesY The New York Times.
The controls are designed to limit China’s ability to increase its own domestic chip production and come after the Biden administration announced similar restrictions in October 2022. The fear is that easier access to advanced semiconductors will allow China to bolster its military and artificial intelligence capabilities. .
There are no plans for a public announcement on the deal, and it may take “months” for Japan and the Netherlands to “finalize legal agreements,” according to Bloomberg.
“This is such a sensitive issue that the Dutch government chooses to communicate diligently, and that means we only communicate in a very limited way,” Dutch Prime Minister Mark Rutte said during a news conference on Friday when asked about the agreement.
ASML is the company most affected by the restrictions in the Netherlands. It is the only company in the world that produces so-called ultraviolet lithography machines, which are essential for the production of advanced semiconductors. CNBC previously reported that the company was no longer able to ship its advanced extreme ultraviolet (EUV) lithography machine to China, but was still able to ship older deep ultraviolet (DUV) lithography machines.
“If they can’t get those machines, they will develop them themselves”
The new restrictions are expected to prevent the sale of “at least some” of these DUV machines, Bloomberg previously, which will further limit the ability of Chinese companies to produce advanced chips and set up production lines. ASML CEO Peter Wennink previously told CNBC that China accounted for about 15 percent of the company’s sales in 2022.
Wennink has said the restrictions are unlikely to stop China from eventually building its own versions of the machines. “If they can’t get those machines, they will develop them themselves,” Wennink said. Bloomberg. “That will take time, but they will eventually get it done.”
On the Japanese side, the restrictions are expected to affect companies such as Nikon and Tokyo Electron.
In addition to cutting exports to China, the White House has used its influence to stimulate domestic chip production. President Joe Biden signed the $280 billion CHIPS and Science Act into law last August, which includes $52 billion in subsidies for semiconductor manufacturing. Intel, TSMC, and Samsung have announced or are actively building new semiconductor manufacturing facilities in the US.
