Japan and Netherlands are joining the US in chip restrictions on China

Japan and the Netherlands will join the United States in imposing chip bans on China, Bloomberg revealed in a report. The goal is to “undercut Beijing’s ambition to build its own domestic chip capabilities”, according to people aware of the situation.

The Dutch company ASML Holding HV will be prevented from transferring deep ultraviolet lithography machines used for chip manufacture, and similar restrictions will be imposed on the Japanese Nikon Corp.

The joint effort is an expansion on US President Joe Biden’s agenda to limit China’s ability to manufacture and develop its own semiconductors, used for AI and machine learning in the military, but will also affect the mobile technology industry as well.

US equipment makers complained that limiting only American companies to trade with China is affecting the balance with competitors, which lead to Dutch and Japanese government reconsidering how ASML, alongside Tokyo Electron, are exporting such machinery.

Japan and Netherlands are joining the US in chip restrictions on China

The moves barely affected the stock market but Shanghai’s Semiconductor Manufacturing International, the biggest chip maker in Mainland China. Hua Hong Semiconductor also felt a slight decline in shares, and the offshore price of the yuan slid 0.1%.

Peter Wennink, CEO at ASML, warned that US-led control on the export of lithography machinery would eventually push China to develop its own advanced gear. “That will take time, but eventually, they’ll get there”, said the executive.