LDN - Business

US pushes Netherlands, Japan to further restrict chipmaking equipment to China

[June 19, 2024] By Karen Freifeld

(Reuters) -A U.S. official was heading to Japan after meeting with the Dutch government to try to push allies to further restrict China's ability to produce cutting-edge semiconductors, a person familiar with the matter told Reuters on Tuesday.

Alan Estevez, the U.S. export policy chief, was trying to build on a 2023 agreement between the three countries to keep chipmaking equipment from China that could help to modernize its military.

In a response, Chinese foreign ministry spokesperson Lin Jian said China was opposed to the U.S. engaging in confrontation and "coercing other countries and suppressing China's semiconductor industry".

"This behavior has seriously hindered the development of the global semiconductor industry and will eventually backfire," Lin told a press briefing in Beijing.

A spokesperson for the Dutch foreign ministry confirmed a meeting had taken place in the Netherlands on Monday.

Japan's industry ministry said it has various exchanges with the United States but would not comment on diplomatic interactions.

The U.S. first imposed restrictions in 2022 on shipments of advanced chips and chipmaking equipment to China from companies including California-based Nvidia and Lam Research.

Last July, to align with U.S. policy, Japan, home to chip equipment makers Nikon Corp and Tokyo Electron, curbed exports of 23 types of equipment, from machines that deposit films on silicon wafers to devices that etch out the microscopic circuits.

Then the Dutch government began to regulate Netherlands-based ASML's deep ultra violet (DUV) semiconductor equipment to China and the U.S. imposed restrictions on additional DUV machines to a handful of Chinese factories, claiming jurisdiction because ASML's systems contain U.S. parts and components. ASML is the world's biggest chip equipment maker by sales and market capitalization.

Washington is talking to allies about adding 11 more Chinese chipmaking factories to a restricted list, the person said. There are currently five factories on the list, the person said, including SMIC, China's largest chipmaker.

[to top of second column]

A central processing unit (CPU) semiconductor chip is displayed among flags of China and U.S., in this illustration picture taken February 17, 2023. REUTERS/Florence Lo/Illustration/File Photo

The U.S. also says it wants to control additional chipmaking equipment, the person said, asking not to be named because they were not authorized to speak publicly on the issue.

A spokesperson for the U.S. Commerce Department declined comment.

The Dutch Foreign Ministry said Monday's meeting was part of ongoing talks on export policy and security between the U.S. and the Netherlands.

The Netherlands "always has continual contact with our allies," the spokesperson said.

U.S. officials also visited the Netherlands in April to try to stop ASML from servicing certain equipment in China. Under U.S. rules, U.S. firms are barred from servicing equipment at advanced Chinese factories.

But the ASML servicing contracts are still in place, the person said, adding the Dutch government does not have the extraterritorial scope to cut them off.

ASML said in April it expected to be able to service most of the billions of euros worth of equipment it has sold to China, though it cannot use spare parts from the U.S. that would fall under U.S. restrictions. It did not have immediate comment on Wednesday.

Sanctioned Chinese telecoms giant Huawei last year came out with a phone powered by a sophisticated chip. The Huawei Mate 60 Pro was seen as a symbol of the China's technological resurgence despite Washington's efforts.

(Reporting by Karen Freifeld, Toby Sterling, Sam Nussey, Bernard Orr; Editing by David Gregorio, Miral Fahmy and Barbara Lewis)

Back to top