The Chinese chip industry faces threats from the US-Japan-Netherlands alliance

The above information was revealed by The Japan Times and added that the agreement was reached during a trilateral meeting in Washington – USA on January 27 (US time).

The deal is aimed at thwarting Beijing’s ambitions to build up domestic chip capacity. Accordingly, they will expand a number of export control measures that the US passed last October, to companies, including ASML Holding NV, Nikon Corp. and Tokyo Electron Ltd, with headquarters in the Netherlands and Japan.

“Details of the agreement have not been announced yet and the implementation of the agreement may take several months for Japan and the Netherlands to complete the legal procedures,” – The Japan Times quoted a source familiar with the matter.

Washington not only restricts exports of US-made machinery, but also bans US citizens from working with Chinese chipmakers. The measures by The Hague and Tokyo are not as tough.

Japan and the Netherlands are home to the main suppliers of semiconductor manufacturing equipment. The Netherlands has ASML Holding Company which controls the market for photolithography, one of the most important steps in the production of electronic components. Meanwhile, the US is home to the largest chip equipment manufacturers.

Without access to the products of US companies like Applied Materials, Lam Research or KLA, it would be nearly impossible for Chinese companies to build production lines capable of producing cutting-edge chips, analysts say. up.

Illustration of the path of optical light inside ASML’s TWINSCAN NXE:3400B semiconductor lithography tool. Photo: REUTERS

Once the agreement is approved, the Netherlands will prevent ASML Holding from selling to China some lithography equipment for the semiconductor industry. This is a very important device for making advanced chips. Meanwhile, Japan will place similar restrictions on Nikon.

Currently, both Dutch and Japanese officials declined to comment on the information “reaching an agreement with the US” to prevent China from developing domestic chips.

A Nikon spokesman also declined to comment “before something is officially announced”, while Tokyo Electron executives also did not comment on the information because “outside of regular business hours”.

Analysts say the agreement with the Netherlands and Japan to prevent the development of Chinese semiconductor technology is a victory for the administration of US President Joe Biden.

In response, ASML Holding CEO Peter Wennink warned that the US action could have unintended consequences, predicting that China would develop its own chip technology rather than import it.

The US and China are in fierce competition in the semiconductor sector. China sought to reduce its dependence on imports after the US tightened restrictions on the chip sector in October 2022.