Japan joins the US by restricting chipmaking gear exports to China
- Japan has finally caved into the US push to have its allies restrict tech shipments to China.
- Japan will expand restrictions on exports of 23 types of leading-edge chipmaking technology to China.
- The restrictions would mean ten Japanese companies would need licenses to ship a broader-than-expected array of equipment to transform silicon into chips.
For almost six months, the US was lobbying its allies, including Japan, to join Washington in tightening shipments of semiconductor tools to China. It took a little while for Japan and the Netherlands to agree to join the US, but both countries took time to chart a middle road between the two superpowers.
Now, Japan Trade Minister Yasutoshi Nishimura has announced that Tokyo would expand restrictions on exports of 23 types of leading-edge chipmaking technology to China. Though Nishimura claims the move was not in coordination with the US and was not a ban, it is apparent that Japan’s restriction aligns with the US ratcheted-up efforts to limit China’s access to crucial semiconductor technologies.
He claims these export controls apply to all regions and are not meant to target one country. “We will be looking at whether there is any danger of military appropriation,” he told reporters earlier today, according to Bloomberg’s report. The measures will be subject to public comment before implementation, slated for July.
The report also noted that the ruling would now mean ten Japanese companies, including leading gearmaker Tokyo Electron Ltd. would need to get licenses to ship a broader-than-expected array of equipment used to transform silicon into chips, spanning cleaning, deposition, annealing, lithography, etching, and testing.
For context, Japan and the Netherlands are where some of the world’s largest manufacturers of semiconductor manufacturing equipment are headquartered. With all its might, the US has been trying to gather allies because experts reckon that the US-driven export controls could only effectively choke China off entirely if other countries in the supply chain do the same.
Thes announcement comes after a verbal deal was reached between the US, Netherlands, and Japan in January 2023. Before Japan’s move, the Hague, on March 9, revealed the first public details of its approach, which amounts to an intention to impose export restrictions on the “most advanced” semiconductor technology.
In short, Japan is still more cautious by not stating China as the target for its export restrictions. Countries categorized as Japan’s most-favored trading partners will be able to continue importing without a license, the country’s trade ministry officials said.
“Those nations include Taiwan and Singapore, key global semiconductor supply chain participants. Shipments of restricted equipment to China would require sign-offs by export control officials,” the report by Bloomberg reads. The export control by Japan will affect a wide range of equipment, including etching machines capable of making 14- and 16-nanometer and more advanced chips.
Nishimura believes the impact on companies will be limited and that Japan will continue shipments if their exports are not being reappropriated for military use. Japan’s planned export controls also include tools to clean silicon wafers of impurities, extreme ultraviolet mask-testers, and immersion lithography machines. Screen Holdings, Lasertec, and Nikon are suppliers of such equipment.
Even for the Netherlands, home to ASML Holding NV, its plans to curb exports of some so-called immersion DUV lithography products do not target any particular country. Rules from the Hague are expected to be published before the summer, adding to existing restrictions for the most cutting-edge lithography machines critical to producing the world’s most advanced chips.
On the other hand, the US has banned American gear suppliers Applied Materials Inc, Lam Research Corp., and KLA Corp. from shipping some of their most advanced technology to China. For the Biden Administration, Japan’s Tokyo Electron and the Netherlands’s ASML Holding NV are the two other critical suppliers the US needs to contain China’s technological ascent.
Besides collaborating to restrict chip exports, Japan is also part of a Chip Alliance proposal, which includes South Korea, Taiwan, and the US. The countries in the alliance each excel in specific segments of the semiconductor industry. For the US, combining the strength of each participant will create a complete semiconductor supply chain that runs from design to manufacturing.
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