Japan, Netherlands to join US in restricting chip exports to China – report

by Jacob Fuller

The United States has secured a deal with the Netherlands and Japan to restrict exports of some advanced chip-making machinery to China in talks that concluded on Friday, Bloomberg reported, citing people familiar with the matter.

The agreement would extend some export controls the United States adopted in October to companies based in the two allied nations, including ASML Holding NV, Nikon Corp, and Tokyo Electron Ltd, the report said.

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.

John Kirby, the White House national security spokesperson, earlier said the officials were talking about issues that are “important to all three of us.”

“And certainly the safety and security of emerging technologies is going to be on that agenda,” he told reporters.

A source familiar with the talks said restricting exports of semiconductor manufacturing equipment to China was among the topics.

Getting the Netherlands and Japan to impose tighter export controls on China would be a major diplomatic win for 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.

When asked about the Bloomberg report, the White House declined to comment beyond Kirby’s earlier remarks.

The Dutch foreign ministry and a spokesperson at Japan‘s Ministry of Economy, Trade, and Industry declined to comment.

A spokesperson at Nikon declined to comment, saying the company could not speak about something that had not been officially announced. Officials at Tokyo Electron were unavailable for comment when Reuters contacted them outside regular business hours.

The Netherlands‘ prime minister, Mark Rutte, earlier said that it was not clear whether his government would disclose the result of talks with the United States over new export restrictions for the semiconductor industry.

Japanese firms would still be able to sell non-advanced products to China under the regulation, and any dip in shipments to China could be covered in the medium-to-long term by increasing output to regions such as the United States, Germany, and India, said Akira Minamikawa, an analyst at research company Omdia.

But the Japanese government and firms may object to the restriction if it includes measures such as a ban on sending engineers to their equipment customers, Minamikawa said, adding: “That would bring too large an impact on their businesses.”

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