Chip war: Japan and Netherlands expected to join US in ban on tech exports to China

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A Washington official has made the most direct comments by a US authority to date acknowledging the existence of a deal with Japan and the Netherlands for those countries to impose new restrictions on exports of chipmaking tools to China.

“We can’t talk about the deal right now,” said Don Graves, deputy commerce department secretary, on the sidelines of an event in Washington. “But you can certainly talk to our friends in Japan and the Netherlands.”

Bloomberg reported on Friday an agreement had been finalised and two people familiar with the matter later confirmed the news to Reuters.

The United States in October imposed sweeping export restrictions on shipments of chipmaking tools to China, seeking to hobble Beijing’s ability to expand its chip industry and enhance its military capabilities.

For the restrictions to be effective, Washington needed to bring on board the Netherlands and Japan, home to major chipmakers ASML and Tokyo Electron, among others.

The commerce department said in an email it would continue to coordinate on export controls with foreign allies, calling this a “priority”. “We recognise that multilateral controls are more effective than unilateral controls.

Officials from the Netherlands and Japan were in Washington discussing a wide range of issues in talks led by White House national security adviser Jake Sullivan on Friday.

When asked on Friday if an agreement on semiconductors had been discussed, US president Joe Biden said: “Yes, we talked about a lot of things, but a lot of it is private.”

China’s semiconductor industry has become a key target of US export restrictions. Beijing has ploughed money into cultivating its domestic industry but its fabrication plants, known as fabs, still heavily rely on foreign-made equipment.

SMIC, China’s largest fab, makes chips that go into products for the automotive sector, internet-of-things devices and some smartphones.

The US put SMIC on its Entity List in 2020 – effectively barring Dutch firm ASML from providing extreme ultraviolet lithography machines to SMIC.

YMTC is China’s only player in the global Nand memory market – an ultra-competitive sector long dominated by a handful of firms from the US and South Korea. It designs and makes chips and was added to the US Entity List in 2022.

YMTC unveiled a chip in 2022 with 232 layers of memory cells, placing it closer to rivals such as South Korea’s Samsung. Experts said equipment export restrictions are likely to derail further efforts.

CXMT is China’s only major player designing and making Dram chips, which like Nand memory is a sector long dominated by a handful of companies in the United States, South Korea and Taiwan.

With Reuters

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