US pushes allies to tighten chip restric­tions

The US is push­ing Japan and the Neth­er­lands to tighten restric­tions on exports of chip­mak­ing equip­ment to China, fol­low­ing a series of advances by black­lis­ted Chinese tech com­pan­ies  Hua­wei  and  SMIC .

• Wash­ing­ton imposed uni­lat­eral export con­trols in Octo­ber 2022
  • in an effort to slow Chinese efforts to build or obtain high-per­form­ance semi­con­duct­ors
    • that can be used for mil­it­ary pur­poses.
• The Neth­er­lands and Japan,
  • where com­pan­ies spe­cial­ise in the pro­duc­tion of advanced chip­mak­ing equip­ment,
    • joined the US last year by enfor­cing export curbs on soph­ist­ic­ated machines and com­pon­ents.

• But des­pite the con­trols,
  • Chinese mobile phone maker Hua­wei and Shang­hai-based Semi­con­ductor Man­u­fac­tur­ing Inter­na­tional Cor­por­a­tion
    • both of which are on a US trade black­list
      • revealed in August that they had pro­duced an advanced chip

• The Biden admin­is­tra­tion wanted Tokyo and The Hague
  • to go fur­ther to close gaps in the exist­ing regime
• Pos­sible meas­ures include:
  • restrict­ing exports of less soph­ist­ic­ated machines, as well as
  • intro­du­cing restric­tions on ser­vi­cing and repairs offered
    • for machines already pur­chased by Chinese cli­ents before the con­trols took force.
• The Hague is press­ing Brus­sels to coordin­ate export con­trols after being isol­ated last year.

• Wash­ing­ton was also try­ing to per­suade South Korea
  • to join the Neth­er­lands and Japan by impos­ing sim­ilar restric­tions.
• South Korea has not rep­lic­ated the Dutch and Japan­ese con­trols
  • because its com­pan­ies do not man­u­fac­ture chip­mak­ing equip­ment
    • as soph­ist­ic­ated as the machines pro­duced by the Neth­er­lands’  ASML  or Japan’s  Tokyo Elec­tron .
• China’s heav­ily sub­sid­ised chip­makers, includ­ing SMIC,
  • had been using less soph­ist­ic­ated equip­ment to pro­duce advanced chips at a loss.

• Chinese imports of for­eign semi­con­ductor equip­ment surged to record highs last sum­mer
  • just before the Dutch and Japan­ese con­trols,
    • as chip­makers in the coun­try pre­pared for the curbs.