| 21 April 2024, Sunday |

Japan, Netherlands to join U.S. in restricting chip equipment exports to China, Bloomberg reports

According to Bloomberg News, Japan and the Netherlands may soon join the United States in limiting shipments of machinery for making semiconductors to China.

According to persons acquainted with the situation, negotiations between the nations will end as soon as this Friday, with the Netherlands prohibiting ASML Holding NV from supplying equipment to China needed to manufacture specific types of sophisticated semiconductors.

Deputy Chief Cabinet Secretary Seiji Kihara, a government spokesperson, said Japan would make “appropriate steps” based on the United States’ and other nations’ regulatory moves. He declined to comment further when asked about the report at a Friday afternoon media briefing.

The Dutch foreign ministry declined comment. Prime Minister Mark Rutte, who has said he expects to reach agreement with the United States and other allies on stricter controls but that the Netherlands will not simply adopt U.S. rules, will take questions at his weekly news briefing later on Friday.

Sources have told Reuters that a deal between Dutch and U.S. officials could be clinched by the end of the month as representatives from the two countries meet in Washington on Friday.

Getting the Netherlands and Japan to impose tighter export controls on China would be a major diplomatic win for U.S. President Joe Biden’s administration, which in October announced sweeping restrictions on Beijing’s access to U.S. chipmaking technology to slow its technological and military advances.

Without Japanese or Dutch cooperation, U.S. companies would face a competitive disadvantage.

“We have been in discussion with the United States and other countries regarding the export-control regime,” Yasutoshi Nishimura, Japan’s Minister of Economy, Trade and Industry, told reporters on Friday.

“We will implement any measures in accordance with our Foreign Exchange Law and through international cooperation,” he added, declining to provide further details.

While Nikon could be affected, the Japanese company most likely to be affected by new restrictions will be chip manufacturing machinery maker Tokyo Electron, which relies on China for about a quarter of its sales, said Masahiko Hosokawa, a Meisei University professor and former director general of trade control at the ministry.

“A balance needs to be struck so no one among Japan, the United States and Europe will be disproportionately disadvantaged. It’s about fairness,” he said.

Dutch officials have insisted that fresh controls address national security concerns rather than favor U.S. chip-related companies, a source familiar with the discussions told Reuters.

Japan expects sales at affected chip-related companies to rebound quickly because the market for their equipment is expanding, a trade and industry official involved in overseeing semiconductor firms told Reuters. He asked not to be identified because he is not authorised to speak to the media.

  • Reuters