The United States and the Netherlands are set to deliver a one-two punch to China’s chipmakers this summer by further restricting sales of chipmaking equipment, part of the country’s ongoing effort to prevent their technology from being used to strengthen China’s military. The Dutch plan to curb specific equipment from national champion ASML, and other companies, while the U.S. is expected to go one step further and use its long reach to withhold even more Dutch equipment from specific Chinese fabs.
The Dutch, Europe’s biggest tech company and a major supplier of machines that make advanced processor chips, have already been criticized by China for not restricting the country’s access to their high-end technology. The nation also has a lot of leverage because it owns the world’s only maker of Extreme Ultraviolet Lithography machines, the most sophisticated type of lithography used in making computer chips. The machines are the heart of a global supply chain, including American companies like Lam Research and Applied Materials.
On Wednesday, Dutch Trade Minister Liesje Schreinemacher announced that the country would impose new restrictions on exporting machines that produce advanced processor chips. The restrictions will impact a handful of Chinese plants, including a fab operated by Semiconductor Manufacturing International Corp., the largest chipmaker in the country. The government plans to introduce the new rules before summer, citing national security reasons, she wrote in a letter to parliament. The letter said that the Netherlands would limit the export of a machine that can make chips with dimensions less than 14 nanometers. The new limits are a follow-up to existing restrictions on chipmaking equipment, the ministry said.
It’s still being determined whether the Netherlands will seek a waiver for ASML from the planned U.S. restrictions based on national security concerns. However, that possibility was raised in talks between officials in both nations. A spokeswoman for ASML declined to comment, as did a representative of the Dutch ministry.
The Dutch and the U.S. are working closely on the issue because they have similar national security concerns, according to people familiar with the discussions who asked not to be identified because the negotiations were confidential. The U.S. Commerce Department oversees export controls.
The U.S. has imposed export restrictions on chipmaking equipment from companies in its supply chain that sell to Chinese manufacturers. It is pushing other countries with significant investments in technology to follow suit. The people said that the Netherlands is considering similar moves, and Japan is involved in three-way talks on the issue with the Netherlands and the U.S. A deal on the Dutch curbs could be announced next month. The ministry and ASML declined to comment. The government in Beijing didn’t respond to a request for comment. The White House, which oversees the National Security Council, also didn’t immediately respond to a request for comment. Neither the National Security Council nor the Commerce Department responded to requests for more details about the upcoming announcements.
