The Netherlands and Japan join the United States in restricting chip exports to China

Japan and the Netherlands will restrict exports of chip-making tools to China after reaching a deal with the United States designed to make it more difficult for China’s military to develop advanced weapons.

Several people familiar with the trilateral agreement said the two countries reached an agreement on Friday after a final round of high-level talks at the White House. The agreement comes three months after Washington imposed unilateral export controls that prevented US companies from selling advanced chipmaking equipment to Chinese groups.

The White House declined to comment. But the agreement marks a significant milestone in US efforts to work with allies to block Chinese efforts to develop it Semiconductors industry.

The Joe Biden administration had been negotiating with the states for two years but met resistance because they were concerned about the impact on their chipmaking tool companies, notably ASML in the Netherlands and Tokyo Electron and Nikon in Japan.

In October, the US announced Sweeping export controls unilaterally They are designed to complicate Chinese efforts to acquire or develop advanced semiconductors for use in supercomputers and other military-related applications, such as artificial intelligence and modeling of nuclear weapons and hypersonic weapons.

The US chipmakers’ groups that dominate the sector – Applied Materials, Lam Research and KLA – were worried that the October move had put a damper on them but not ASML and Tokyo Electron. At the time, Alan Estevez, the Commerce Department’s top official for export controls, justified the move, saying it would prove to allies that the United States had “leather in the game” and was willing to make tough decisions.

Estevez and Tarun Chhabra, the National Security Council official who was the driving force behind the move, have stepped up their efforts in recent months to impress allies during their visits to Tokyo and The Hague.

Several people said that the three countries decided not to release the details because of the sensitive nature of the discussions. Washington wanted to give Japan and the Netherlands space to decide how to deliver the restrictions. It remains unclear what mechanisms countries will use to impose restrictions on their chip tool companies.

Tokyo and The Hague also worry about being seen as signatories to a US policy that specifically targets China.

Dutch Prime Minister Mark Rutte said this week that while public interest in chip tool exports was focused on Japan, the Netherlands, the United States and China, the discussion was “broader than that”.

the increased pressure on allies in recent months after US National Security Adviser Jake Sullivan signaled in September a major change in policy. In a speech, he said the United States should abandon the “tiered scale” approach of trying to stay two generations ahead, and instead “maintain as much of the lead as possible.”

Rutte told the Financial Times in an interview that the Netherlands sees “eye to eye” with those who have argued that high-end Western chips should not be used in some countries’ weapons. He said that Western countries and Asian partners should maintain the “leadership” in chips.

He added that the discussion was broader than just one Dutch company. Rutte said he was “absolutely convinced” that a “solution could be reached with the many partners we are discussing with” and added that “The Hague has been coordinating with everyone”.

In a statement, ASML said it understood “that steps have been taken toward an intergovernmental agreement which, as far as we understand, will focus on advanced chip manufacturing technology, including but not limited to advanced lithography tools. Before it goes into effect, it must be Elaborating and implementing it into legislation will take time.”

ASML added that based on comments from government officials and its understanding of the timeline, “we do not expect these actions to have a material impact on the outlook we published for 2023.”

Bloomberg first reported the deal.

Continued Demetrius of Sevastopol And Sam Fleming on Twitter