The Netherlands and Japan agree to limit the export of chip-making tools to China

What happened now? The Netherlands and Japan have reached an agreement with the US to impose restrictions on the export of chip manufacturing tools to China. The move marks the end of two years of negotiations during which the Biden administration tried to persuade countries to impose US-style export controls on chip-making equipment.

Reports released last month said the Netherlands and Japan were close to banning the export of advanced chip-making devices to China after talks with Washington. While the delicate nature of the deal means it hasn’t been announced publicly, several people familiar with the matter say the agreement was reached on Friday.

One of the reasons the negotiations took so long was the fear of how the ban would affect the national chip giants: ASML in the Netherlands and Tokyo Electron and Nikon in Japan.

ASML, the world’s largest supplier of lithography machines used in the chip manufacturing process, has already been banned from selling its state-of-the-art Extreme Ultraviolet (EUV) lithography equipment, which costs about $164 million per unit, to Chinese customers because it cannot obtain an export license. from the Dutch government due to pressure from the United States. ASML is now prohibited from selling at least some of its old deep ultraviolet (DUV) lithography tools to Chinese customers.

The US has tightened controls on chip exports to China over the past 12 months. In October, drastic restrictions were introduced, which meant that KLA Corp, Lam Research Corp and Applied Materials Inc. could no longer export the equipment needed to manufacture sub-14nm semiconductor components to an Asian country. This has raised fears among US companies that ASML will break into the Chinese market space it left behind.

The newspaper “New York Times writes that it will likely take some time for Japan and the Netherlands to make changes to their laws and regulations to introduce new restrictions.

The US has long said its restrictions will prevent China from developing semiconductors for military use, including supercomputers, simulated nuclear weapons and hypersonic weapons. Export regulations are also affecting the country’s “Made in China 2025” plan to upgrade domestic manufacturing facilities and reduce reliance on foreign chip makers.

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