WASHINGTON – The Netherlands and Japan, both manufacturers of the world’s most advanced equipment for manufacturing semiconductors, agreed Friday to join the United States. Apart from some exports of their high tech machinery For China, people familiar with the deal said.
The deal, which followed high-level meetings with US national security officials in Washington, would help expand broader restrictions. Unilaterally issued by the Biden administration Types of semiconductor technology to be shared with China in October
Because of the sensitivity of the deal, countries have not publicly announced it, and details are unclear. But the deal is likely to put the countries’ tech industries on a more even footing, preventing companies in Japan and the Netherlands from rushing to claim market share in China that has been abandoned by U.S. firms. US companies have said the prospect will put them at a disadvantage.
The White House and the Dutch government declined to comment. The Japanese government did not immediately respond to a request for comment.
In October, the United States imposed strict restrictions on sales to China of both semiconductors and the machinery used to make them, arguing that Beijing could use the technology for military purposes, such as breaking American codes or guiding hypersonic missiles. But even before those restrictions were granted, the United States had been pushing for more restrictions on advanced technology exports from the Netherlands and Japan to China.
The October rules restricted certain exports to China from countries outside the United States. Using a new regulation called the Foreign Direct Product Rule, the Biden administration barred companies that use U.S. technology, software or inputs from selling certain advanced semiconductors to China. But these measures only apply to the chips, not the machines used to make them.
Instead, the White House continued to press allies to pass restrictions on the sale of semiconductor manufacturing equipment by companies such as the Dutch company ASML or Tokyo Electron in Japan. The White House argued that selling this advanced machine to China would allow Beijing to one day develop its own versions of advanced products that the United States cannot buy.
The ongoing negotiations had to overcome commercial and logistical concerns. Like the Americans, the Dutch and Japanese worried that if they exited the Chinese market, foreign competitors would take their place, said Emily Benson, a senior fellow at the Center for Strategic and International Relations, a Washington think tank. Over time, that could “affect our ability to maintain a technological edge over competitors,” he said.
The Dutch government has already banned the sale of its advanced semiconductor machines, known as extreme ultraviolet lithography systems, to China. But the US encouraged the Dutch to master a slightly less advanced system called deep ultraviolet lithography. The agreement reached Friday includes at least some restrictions on that equipment, according to a person familiar with its terms.
Governments face questions about whether they have the legal authority to impose restrictions like the United States, as well as extensive technical debates about which technologies to regulate. Japan and the Netherlands will need some time to make changes to their laws and regulations to implement the new restrictions, Ms. Benson added, and it could take months or years for regulations in the three countries to mirror each other.
