China has threatened severe economic retaliation against Japan if Tokyo further restricts sales and servicing of chipmaking equipment to Chinese firms, complicating US-led efforts to cut the world’s second-largest economy off from advanced technology.
Senior Chinese officials have repeatedly outlined that position in recent meetings with their Japanese counterparts, people familiar with the matter said.
Toyota Motor Corp privately told officials in Tokyo that one specific fear in Japan is that Beijing could react to new semiconductor controls by cutting the country’s access to critical minerals essential for automotive production, the people said, declining to be named discussing private affairs.
Photo: Reuters
Toyota is among the most important companies in Japan and is deeply involved in the country’s chip policy, partly reflected in that it has invested in a new chip campus being built by Taiwan Semiconductor Manufacturing Co (台積電) in Kumamoto, one of the people said.
That makes its concerns a major consideration for Japanese officials, in addition to those of Tokyo Electron Ltd, the semiconductor gear-maker that would be principally affected by any new Japanese export controls.
The US has been pressuring Japan to impose additional restrictions on the ability of firms including Tokyo Electron to sell advanced chipmaking tools to China, part of a long-running campaign to curtail China’s semiconductor progress.
With those talks, senior US officials have been working with their Japanese counterparts on a strategy to ensure adequate supplies of critical minerals, some of the people said, especially as China imposed restrictions on the exports of gallium, germanium and graphite last year.
The concern about Toyota has some historical precedent. In 2010, China temporarily suspended exports of rare earths to Japan after a clash in waters of the East China Sea claimed by both sides.
The move shook Japan’s electronics sector and threatened to choke off global supplies of high-power magnets produced in Japan employing rare earths from China. Tokyo has since worked with mixed success to reduce its reliance on Chinese rare earth imports.
The administration of US President Joe Biden is confident that they can assuage Tokyo’s concerns and reach an agreement with Japan by the end of this year, some of the people said.
However, there are more aggressive options: Behind the scenes, the US has been wielding a power known as the foreign direct product rule (FDPR), which allows Washington to control sales of products made anywhere in the world, provided they use even the smallest amount of US technology.
In the current talks, US officials so far have refrained from invoking that authority against Japan and other key allies, which see the rule as a draconian step. A senior administration official said the US would prefer to reach a diplomatic solution, but would not rule out the use of the FDPR.
South Korean Minister for Trade Cheong In-kyo said the US should offer incentives and more flexibility to encourage allies to collaborate on China chip controls.
“For countries or companies trying to comply with the US in good faith, there should be some kind of carrots,” Cheong said in his first interview with media since he took office in January. “That would help US policy be embraced more easily.”
South Korea is unable to send China the types of chipmaking equipment that would enable next-generation technology, Cheong said.
He said he anticipates overall semiconductor trade between the two countries to decline in the long run due to various limitations.
Cheong declined to specify what US incentives would be welcome, or comment on whether Seoul and Washington are in talks over export controls on the latest technology.
He said his country would respond to any additional restrictions by exploring ways to reduce business disruptions.
“We’ll have to find a way to the extent that the impact on our companies’ business is minimized,” he said.
Cairo’s new monorail slices across the city skyline, running above the familiar chaos of blaring horns and aging buses’ exhaust fumes that mark rush hour below. The US$4.5 billion monorail, opened this month, is among Egypt’s most prominent new transport projects, part of a debt-funded infrastructure drive criticized for sapping state finances while bringing limited benefits to most of the country’s 109 million people. “It feels like you’re in a different country,” said Ramy Sayed, a restaurant manager, aboard a driverless Innovia 300 train. “No noise, no traffic, we’re not used to this.” The eastern line runs 56km from the bustling middle-class
Starlux Airlines Co (星宇航空) today unveiled a long-haul network expansion plan at a shareholders’ meeting in Taipei, including direct flights to Barcelona, Spain, and Zurich, Switzerland, as well as a service connecting Taipei, Sydney and New Zealand. Starlux is to become the first Taiwanese carrier to offer non-stop services to the two European cities, while the inaugural oceanic route is expected to expand transit opportunities within the Australia-New Zealand market, Starlux said. Flight services to Chicago, Dallas, Washington and New York are under evaluation, the airline added. Prior to the shareholders’ meeting, the airline earlier this year announced that it would be
Taiwanese prosecutors suspect that three people successfully smuggled at least one shipment of Nvidia Corp artificial intelligence (AI) chips to China after first exporting them to Japan, people familiar with the matter said. The trio was detained last week by the Keelung District Prosecutors’ Office for allegedly falsifying documents related to exports of Super Micro Computer Inc servers containing advanced Nvidia chips, which the US has barred from sale to China without a license from Washington. The move marked Taiwan’s first public crackdown on AI chip diversion after years of pressure from the US to take a more active role in curtailing
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) employee bonuses are likely to grow more than 30 percent this year, in line with the past few years as the company’s profits continue to set new records, an anonymous source cited TSMC chairman C.C. Wei (魏哲家) as saying yesterday. TSMC, the world’s largest contract chipmaker, is committed to taking care of its workers, the source said, citing Wei’s meeting with employees yesterday morning. Wei also expressed gratitude to employees for their contribution to the company’s improving bottom line, the source added. Since 2023, TSMC’s employee bonuses have grown at an annual rate of
RSS