Japan and the Netherlands will soon agree to join the U.S. in restricting exports of semiconductor manufacturing equipment to China, Bloomberg reported. According to Bloomberg, citing people familiar with the matter, negotiations between the countries concerned will end as early as Friday, and the Netherlands will limit ASML’s sales to China of machines used to make certain types of advanced chips.
Japan will impose similar restrictions on Nikon, the report said.
Sources told Reuters that Dutch and U.S. officials could reach an agreement by the end of the month, with representatives from the two countries set to meet in Washington on Friday.
Getting the Netherlands and Japan to impose stricter export controls on China would be a major diplomatic victory for the administration of US President Joe Biden. The Biden administration announced sweeping restrictions on Beijing’s access to U.S. chipmaking technology last October to slow its technological and military progress.
Without the cooperation of Japan or the Netherlands, American companies would face a competitive disadvantage.
“We have been discussing export control systems with the U.S. and other countries,” Japanese Economy, Trade and Industry Minister Yasutoshi Nishimura told reporters on Friday. “We will implement any measures by the Foreign Exchange Law and international cooperation,” he added, declining to give further details.
Masahiko Hosokawa, a professor at Japan’s Star University and former trade control bureau chief at Japan’s Ministry of Industry, said Nikon could be affected, and the Japanese company most likely to be affected by the new restrictions would be chipmaking machinery maker Tokyo Electron, which has about a quarter of its shares. Sales are dependent on China.
“There needs to be a balance where no one is disproportionately disadvantaged in Japan, the U.S., and Europe. It’s about fairness,” he said. A source familiar with the discussions told Reuters that Dutch officials insisted that the new controls were aimed at addressing national security concerns rather than benefiting U.S. chip-related companies.
Japan expects sales of affected chip-related companies to rebound quickly as the market for its equipment expands, a trade and industry official who oversees semiconductor companies told Reuters. He asked not to be named because he was not authorized to speak to the media.