US consulted Japan, Netherlands on curbs for chips to China

The United States has spoken with its partners, including Japan and the Netherlands, to tighten chip-related exports to China, Jake Sullivan, the White House national security adviser, said on Monday.

The Biden administration aims to cut China off from certain semiconductor chips made anywhere in the world with U.S. equipment, in a bid to slow Beijing’s technological and military advances, issuing a series of curbs in October.

Sullivan’s comments followed a report by Bloomberg News that the two countries had agreed in principle to join the U.S.-led technology export control, citing people familiar with the matter.

Asked about the report, Japanese Trade Minister Yasutoshi Nishimura said co-operation in export control figured in a telephone conversation he had with U.S. Commerce Secretary Gina Raimondo, but declined to elaborate.

“I cannot go into details as they are diplomatic exchanges, but Japan has been implementing its export control strictly, based on the foreign exchange and foreign trade law in the spirit of international co-operation,” he told reporters.

Apart from some U.S. gear suppliers, Japan’s Tokyo Electron Ltd (8035.T) and Dutch lithography specialist ASML Holding NV (ASML.AS), were the two critical players needed to make the sanctions effective, making their governments’ adoption of the curbs a key milestone, Bloomberg said.

The new curbs may be announced in coming weeks, it added.

A spokesperson for Tokyo Electron said the company was in no position to respond, since the matter had to do with each country’s regulations.

“We intend to keep a close eye on the situation constantly and deal with it appropriately,” the spokesperson added.

China is Tokyo Electron’s largest market, accounting for 26% of its sales of 1.94 trillion yen ($14.1 billion) in chip-making equipment for the year that ended in March.

For Japanese chip-testing equipment maker Advantest Corp (6857.T), China is the second-largest market, after Taiwan. Orders of 189 billion yen came in from China in the previous business year, or 27% of its total.

In another development underlining ties between Tokyo and Washington, IBM Corp and Rapidus, a newly formed chip maker backed by Japan, unveiled a partnership on Tuesday that aims to make the world’s most advanced chips in Japan by the second half of the decade.

Dario Gil, the U.S. firm’s research director, said the two companies would work together to make IBM’s 2-nanometer-node chips, unveiled last year. Reuters