US Pressures Japan And Netherlands To Tighten Chip Equipment Exports To China: Report

In a bid to further restrict China’s access to advanced semiconductor technology, the United States is reportedly urging Japan and the Netherlands to tighten their export policies.

What Happened: A U.S. official, Alan Estevez, the chief of export policy, is currently in Japan after holding discussions with the Dutch government. These meetings aim to encourage these allies to impose stricter controls on the export of chipmaking equipment to China, a source familiar with the matter told Reuters.

This move is a continuation of the 2023 agreement between the U.S., Japan, and the Netherlands to prevent China from acquiring advanced chipmaking equipment that could potentially enhance its military capabilities.

The U.S. initially imposed wide-ranging restrictions in 2022 on the export of advanced chips and chipmaking equipment to China from companies such as Nvidia Corp. and Lam Research. Following this, Japan also curbed exports of 23 types of equipment to align with U.S. policy.

Subsequently, the Dutch government began regulating the export of ASML Holding ASML deep ultraviolet (DUV) semiconductor equipment to China. The U.S. then imposed additional restrictions on DUV machines in several Chinese factories, citing jurisdiction due to the presence of U.S. parts and components in ASML’s systems.

Now, Washington is in talks with its allies to add 11 more Chinese chipmaking factories to the restricted list. The U.S. is also seeking to control additional chipmaking equipment.

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Why It Matters: The escalating restrictions come amid a broader geopolitical struggle over semiconductor technology. In recent months, China has taken significant steps to counteract U.S. measures. China's Semiconductor Manufacturing International Corp. has been ramping up its chip production using domestic tools, aiming to reduce reliance on American technology.

Additionally, China has launched a $47.5 billion state fund to bolster its semiconductor industry, aligning with President Xi Jinping's goal of achieving semiconductor self-sufficiency.

Chinese scientists have also made strides in developing cost-effective techniques for mass-producing optical chips, potentially softening the impact of U.S. sanctions. This breakthrough involves photonic integrated circuits, which are crucial for supercomputers and data centers.

Meanwhile, the U.S.-China tech war has led to other countries, such as Malaysia, emerging as critical hubs for semiconductor manufacturing. Malaysia’s established infrastructure and skilled labor force have attracted significant investments from global chip firms, including Intel Corp. and Taiwan Semiconductor.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote