Japan and Netherlands Agree to Limit Exports of Chip-Making Equipment to China

Washington has succeeded in persuading two of its allies to curtail the export of advanced chip-manufacturing equipment to China, The Wall Street Journal reported Saturday.

Japan and the Netherlands have joined the Biden administration’s efforts to stymie China’s military progress by limiting its access to these advanced technologies.

On Friday, top national security officials from the three countries met in Washington and, according to sources, agreed to impose such restrictions. But the agreement has not been announced formally, due to concerns that China may retaliate.

Last year, the U.S. announced a rule requiring American chip manufacturers to obtain a license from the Commerce Department to export certain chips that can be used in artificial intelligence calculations and supercomputing essential for modern weapons systems. Nonetheless, it’s unclear what impact such a rule will have on China.

On Sunday, a day after the Journal’s report on the export rule, the publication reported that China’s top nuclear weapons lab continued purchasing American-made chips despite being placed on a U.S. blacklist nearly two decades ago.

“It’s insanely difficult to enforce” these restrictions when it comes to transactions overseas, Kevin Wolf, a former top Commerce Department official,¬†told the Journal.

Under Friday’s agreement, the Netherlands will ban ASML Holding NV, a Dutch manufacturer of photolithography machines, from selling its most advanced immersion lithography machines to China, crucial for producing cutting-edge chips. Meanwhile, Japan will similarly restrict Nikon Corp.

President Joe Biden himself reportedly met with both Japanese Prime Minister Fumio Kishida and Dutch Prime Minister Mark Rutte in recent weeks to discuss these measures. The support of the Japanese and Dutch governments is deemed critical to the success of the U.S.’s export-control policy. Ostensibly the agreement is directed narrowly at a handful of semiconductor-manufacturing equipment makers from these countries, such as ASML, Nikon, and Tokyo Electron Ltd.

The meeting was led by national security adviser Jake Sullivan and attended by Japanese and Dutch officials, including Takeo Akiba, Kishida’s top national security adviser, and Yasutoshi Nishimura, Japan’s minister of economy, trade, and industry. Nishimura stated on Friday that Japan is discussing further export controls with the U.S., but declined to provide specifics.

Despite working closely with the U.S. to counter China’s technological advancement, allies like the European Union, Japan, and South Korea are still cautious in implementing policies that might limit their companies’ business dealings with China. Thierry Breton, the EU’s internal market commissioner, noted in a speech in Washington on Friday that while Europe stands with the U.S. on ensuring common security in technology, actions taken should be limited to security necessities and done transparently and in partnership with Europe.