China’s technical ambitions have been dealt a blow as the United States, Japan, and the Netherlands all opted to tighten restrictions on the transfer of chipmaking equipment to Beijing.
Insiders say that Japan and the Netherlands will announce in the next weeks that they will impose new laws similar to those enacted by the United States in October.
US vs. Japan Chip War
The restrictions in question restrict the export of equipment required to manufacture complex semiconductors. The Biden administration claims the limitations are necessary to prevent Chinese military purchases of advanced chips.
These three countries Japan, the Netherlands, and the United States have the lion’s share of the world’s advanced semiconductor manufacturing infrastructure and expertise. As a result, China would be deprived of the resources it needs to develop sophisticated semiconductors if this trilateral alliance went into action.
Due to export limitations enforced by the US government, American manufacturers like Applied Materials Inc., Lam Research Corp., and KLA Corp. were unable to meet demand.
The governments of Tokyo Electron Ltd. in Japan and ASML Holding NV, a world leader in lithography, in the Netherlands, have approved the export limitations that the US required for the sanctions to have any effect, which is a huge step forward.
China needs help from other countries if it ever hopes to build an economy that can compete on a global scale. The analyst at Sanford C. Bernstein, Stacy Rasgon, said No chance. On Monday, December 12th, the Chinese Ministry of Commerce said that China had filed a dispute with the World Trade Organization regarding export restrictions imposed by the United States.
Officials from China have stated that these restrictions threaten the safety of the global supply chain and that the United States national security worries are unfounded. However, China’s ambitions to become a chip-manufacturing superpower have been met with increasing opposition from throughout the world.
Extra restrictions on Chinese exports are apparently being considered by Dutch officials. Meanwhile, it has been reported by sources that the Japanese government has agreed to such restrictions in recent weeks in order for the two countries to cooperate.
According to one of the insiders, Japan had to win over skepticism from domestic businesses afraid of a drop in Chinese exports. Japan’s Tokyo Electron isn’t the only market leader; Nikon Corp. and Canon Inc. are also extremely influential.
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Japan, Netherlands Move To Limit China’s Advanced Tech
A senior US National Security Council official, Tarun Chhabra, and the Under Secretary of Commerce for Industry and Security, Alan Estevez, met with Dutch authorities to explore export restrictions in late November. Last week, Gina Raimondo, the US Department of Commerce’s secretary, held a teleconference with Yasutoshi Nishimura, Japan’s minister of economy, trade, and industry, to talk about the same things.
By formalizing and strengthening their current export control limits, the governments of the Netherlands and Japan hope to further constrain China’s access to breakthrough semiconductor technology.
Sources said the two countries aim to prevent the transfer to China of machinery used to manufacture semiconductors with a feature size of fewer than 14 nanometers. The regulations are in line with the US government’s recommendations from last October.
The Chinese chip industry leader, Semiconductor Manufacturing International Corp. (SMIC), owns the 14nm technology, which is at least three generations behind the newest innovations on the market but is already the company’s second-best technology.
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