Holland, Japan join US to restrict exports to China

Washington/Brussels: Japan and the Netherlands will soon agree to join the United States in restricting exports of semiconductor manufacturing equipment to China,

Several people familiar with the trilateral agreement said the countries reached an agreement on Friday after a final round of high-level talks at the White House. The accord comes three months after Washington imposed unilateral export controls that barred US companies from selling advanced chipmaking equipment to Chinese groups.

The White House declined to comment. But the deal marks a significant milestone in US efforts to work with allies to hinder Chinese efforts to develop its semiconductor industry.

Joe Biden’s administration has been negotiating with the countries for two years but faced resistance because they were worried about the effect on their chipmaking tool companies, particularly ASML in the Netherlands and Tokyo Electron and Nikon in Japan.

In October, the US announced sweeping unilateral export controls that were designed to complicate Chinese efforts to obtain, or develop, advanced semiconductors for use in supercomputers and other military-related applications.

The US chip manufacturing tool groups that dominate the sector — Applied Materials, Lam Research and KLA — were concerned that the October move imposed restrictions on them but not ASML and Tokyo Electron. At the time, Alan Estevez, the top commerce department official for export controls, justified the move, saying it would prove to allies that the US had “skin in the game” and was willing to take tough decisions.

Several people said the three countries had decided not to make the details public due to the sensitive nature of the discussions. Washington wanted to give Japan and the Netherlands space to decide how to communicate the restrictions. It remains unclear what mechanisms the countries will use to impose the restrictions on their chip tool companies.