Japan and the Netherlands are poised to join the US in limiting China’s access to advanced semiconductor machinery, forging a powerful alliance that could undercut Beijing’s ambitions to build its own domestic chip capabilities, people familiar with the negotiations said.
US, Dutch and Japanese officials are set to conclude talks on a new set of limits to what can be supplied to Chinese companies, the people said on condition of anonymity.
Negotiations were ongoing as of Thursday in Washington, and there is no plan for a public announcement of restrictions to be implemented, the people said.
Photo: Bloomberg
The Netherlands plans to expand restrictions on ASML Holding NV, which would prevent the company from selling to China some of its so-called deep ultraviolet lithography machines, crucial to making some types of advanced chips, and without which attempts to set up production lines are likely impossible.
Japan is to set similar limits on Nikon Corp.
A spokeswoman for the US National Security Council declined to comment.
The joint effort expands on restrictions Washington imposed in October last year to curtail China’s ability to manufacture its own advanced semiconductors or buy cutting-edge chips from abroad that would aid military and artificial intelligence capabilities.
The three countries are home to the companies most important to producing equipment for manufacturing chips, including ASML, Japan’s Tokyo Electron Ltd and the US’ Applied Materials Inc.
US equipment makers have said that the unilateral action by Washington has allowed overseas competitors to continue to operate in one of the biggest markets for their products, and undermined the aim of restricting China’s military advancements.
Tokyo Electron, which has sold chipmaking equipment to China, reversed gains and fell about 1 percent after Bloomberg’s report.
China’s chipmakers dropped too. Shanghai’s Semiconductor Manufacturing International Corp (中芯國際) extended declines to as much as 2.1 percent, while Hua Hong Semiconductor Ltd (華虹半導體) slid as much as 1.5 percent.
“This sets the next escalating move in the US-China tech war a bit more meaningfully and could weaken yuan sentiment a tad in the near term,” Malayan Banking Berhard foreign-exchange strategist Fiona Lim said in Singapore.
China has fought back against the US effort. Beijing filed a dispute with the WTO last month aimed at overturning the US-imposed export controls.
ASML CEO Peter Wennik on Wednesday said that the US-led export control measures against China could push Beijing to successfully develop its own technology in advanced chipmaking gear, in what would be an unintended consequence of the US campaign.
“If they cannot get those machines, they will develop them themselves,” he said in an interview with Bloomberg News.
“That will take time, but ultimately they will get there,” he added.
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