Netherlands, Japan, US Reach Agreement To Throttle China’s Chip Ambitions As Tech War Heats Up

The Biden administration could soon get the Netherlands and Japan to join the US in limiting China’s access to advanced semiconductor machinery, undermining Chinese leader Xi Jinping’s ambitions to become a dominant superpower. 

According to Bloomberg, US, Dutch and Japanese officials wrapped up talks today on new guidelines for what type of chip-making equipment can be exported to China. Negotiations are closed doors, and there is no plan for a public announcement of restrictions. 

The Netherlands will likely curb exports of ASML Holding NV’s ultraviolet lithography machines that produce advanced chips to China. Japan will likely embrace similar limits for Nikon Corp. 

Sources told Reuters that a deal between Dutch and US officials could be reached in several days. Without Japanese or Dutch cooperation, the Biden administration’s move to curb China’s ability to produce high-tech chips for military applications would be limited. 

On Oct. 7, President Biden unveiled a sweeping set of export controls that ban Chinese companies from purchasing advanced chips and chip-making equipment without a license. 

“We have been in discussion with the United States and other countries regarding the export-control regime,” Yasutoshi Nishimura, Japan’s Minister of Economy, Trade and Industry, told Reuters on Friday.

“We will implement any measures in accordance with our Foreign Exchange Law and through international cooperation,” he added. 

Last fall, Mark Williams and Zichun Huang, analysts at Capital Economics, wrote in a report, “the US moves are a major threat to China’s technological ambitions.” The analysts noted that the global semiconductor industry is “almost entirely” dependent on the US. 

What’s very clear is the US-China tech war is accelerating.