Japan And Netherlands to Join US in Restricting Exports to China

As per sources, Japan and the Netherlands will soon agree to join the United States in restricting semiconductor manufacturing equipment exports to China.

Negotiations between the countries are expected to conclude as early as Friday, with the Netherlands prohibiting ASML Holding NV from selling machines used to manufacture certain types of advanced chips to China, according to Bloomberg, citing people familiar with the matter.

According to the report, Japan would impose similar restrictions on Nikon Corp.

According to sources, a deal between Dutch and US officials could be reached by the end of the month when the two countries' representatives meet in Washington.

Getting the Netherlands and Japan to impose tighter export controls on China would be a major diplomatic victory for US President Joe Biden's administration, which announced sweeping restrictions on Beijing's access to US chipmaking technology in October in an effort to slow its technological and military advances.

Without Japanese or Dutch cooperation, American businesses would be at a competitive disadvantage.

"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 sources.

"We will implement any measures in accordance with our Foreign Exchange Law and through international cooperation," he added, declining to provide further details.

According to Masahiko Hosokawa, a Meisei University professor and former director general of trade control at the ministry, the Japanese company most likely to be impacted by new restrictions will be chip manufacturing machinery maker Tokyo Electron, which relies on China for about a quarter of its sales.

"A balance needs to be struck so no one among Japan, the United States and Europe will be disproportionately disadvantaged. It's about fairness," he said.

Dutch officials have insisted that fresh controls address national security concerns rather favour U.S. chip-related companies, a source familiar with the discussions told.

Japan expects sales at affected chip-related companies to rebound quickly because the market for their equipment is expanding, a trade and industry official involved in overseeing semiconductor firms told. He asked not to be identified because he is not authorised to speak to the media.