The chip war between the West and China has begun to expand

Technology export ban: Japan and the Netherlands are going to join the US

The chip war is gaining momentum: Japan and the Netherlands are expected to join the US in banning technology exports to China. Washington officials appear to be confirming a deal to limit semiconductor technology exports to China.

A senior Washington official made the most direct comments from US authorities to date, acknowledging the existence of an agreement with Japan and the Netherlands to impose new restrictions on the export of tools for the manufacture of chips to China, writes The Guardian.

“We can’t talk about a deal right now,” said Don Graves, deputy secretary of commerce, on the sidelines of an event in Washington. “But of course you can talk to our friends in Japan and the Netherlands.”

Bloomberg reported on Friday that an agreement had been reached, and two people familiar with the matter later confirmed the news to Reuters.

The United States in October imposed sweeping export restrictions on chip-making tools to China in an effort to limit Beijing’s ability to expand its chip industry and bolster its military capabilities.

For the restrictions to be effective, Washington needed to involve the Netherlands and Japan, where, in particular, the largest chip manufacturers ASML and Tokyo Electron are located.

The US Department of Commerce said in an email that it will continue to coordinate export controls with foreign allies, calling it a “priority.” “We recognize that multilateral control is more effective than unilateral control.

Officials from the Netherlands and Japan were in Washington discussing a wide range of issues in talks led by White House national security adviser Jake Sullivan on Friday. When asked on Friday if a semiconductor agreement was discussed, US President Joe Biden said: “Yes, we talked about a lot of things, but a lot of it is private.”

China’s semiconductor industry has become a key target of US export restrictions. Beijing has invested in developing its domestic industry, but its manufacturing plants, known as factories, are still heavily dependent on foreign-made equipment.

SMIC, the largest Chinese factory, produces chips that are used in automotive products, IoT devices and some smartphones, according to The Guardian. The US added SMIC to its list of legal entities in 2020, effectively banning the Dutch firm ASML from supplying SMIC with extreme UV lithography machines.

YMTC is the only Chinese player in the global Nand market, a highly competitive sector that has long been dominated by a handful of US and South Korean firms. The company designs and manufactures chips and was added to the list of US legal entities in 2022. In 2022, YMTC introduced a chip with 232 layers of memory cells, bringing the company closer to competitors such as South Korean Samsung. Experts said restrictions on equipment exports are likely to undermine further efforts.