Japan and the Netherlands have agreed in principle to join the US in tightening controls over exports of advanced chipmaking machinery to China, people familiar with the matter said, a potentially debilitating blow to Beijing’s technology ambitions.
The two countries are likely to announce in the next few weeks that they will adopt at least some of the sweeping measures the US rolled out in October to restrict the sale of advanced semiconductor manufacturing equipment, said the people, who asked not to be named because they are not authorized to speak publicly on the matter.
The three-country alliance would represent a near-total blockade of China’s ability to buy the equipment necessary to make leading-edge chips.
Photo: EPA-EFE
The US rules restricted the supply from American gear suppliers Applied Materials Inc, Lam Research Corp and KLA Corp.
Japan’s Tokyo Electron Ltd and Dutch lithography specialist ASML Holding NV are the two other critical suppliers that the US needed to make the sanctions effective, making their governments’ adoption of the export curbs a significant milestone.
“There’s no way China can build a leading-edge industry on their own. No chance,” Sanford C. Bernstein analyst Stacy Rasgon said.
Bloomberg News last week reported that Dutch officials were planning new export controls on China.
The Japanese government agreed to similar restrictions, as the two countries wanted to act in concert, the people said.
Japan had to overcome opposition from domestic companies that would prefer not to lose sales into China, one of the people said.
Besides Tokyo Electron, Nikon Corp and Canon Inc are minor players in the market.
Japan is in discussion with the US and other countries regarding the matter, Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura told a news conference yesterday, declining to comment on the status of ongoing talks.
“We are conducting hearings of domestic firms and studying the impact of the US restrictions,” Nishimura said.
The three countries are the world’s top sources of machinery and expertise needed to make advanced semiconductors.
Senior US National Security Council official Tarun Chhabra and US Under-Secretary of Commerce for Industry and Security Alan Estevez were in the Netherlands late last month to discuss export controls, Bloomberg reported, while US Secretary of Commerce Gina Raimondo talked about the same issues with Nishimura via teleconference last week.
With the move, Dutch and Japanese officials would essentially codify and expand their existing export control measures to further restrict China’s access to cutting-edge chip technologies.
The two governments are planning to impose a ban on the sale of machinery capable of fabricating 14-nanometer or more advanced chips to China, the sources said.
The measures align with some rules Washington set out in October.
The 14-nanometer technology is at least three generations behind the latest advances available on the market, but it is already the second-best technology that Chinese chipmaking firm Semiconductor Manufacturing International Corp (中芯國際) owns.
Asked at a briefing on Monday in Washington about a potential agreement with Japan and the Netherlands, US National Security Adviser Jake Sullivan said: “I’m not going to get ahead of any announcements.”
“We are very pleased with the candor, the substance and the intensity of the discussions that are taking place across a broad range of countries who share our concerns and would like to see broad alignment as we go forward,” Sullivan said. “Alignment is a priority for us. We’re working towards that.”
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