Japan announced restrictions on semiconductor exports to China.


Tokyo Japan

Kyodo News reported that Japan has agreed to join forces with the Netherlands and the United States to limit the export of advanced semiconductor manufacturing equipment to China. The new regulation, which is due to take effect in the spring, aims to prevent China from developing advanced chips that could boost its military capabilities.

The Japanese government’s decision to restrict chip makers will be made through an amendment to the country’s foreign exchange law. However, China will not be specifically mentioned in the new regulation to reduce the risk of retaliation from the country.

As early as 2022, the US imposed restrictions on the export of advanced chip-making equipment to China. The Biden administration then expanded the restrictions in September 2022 to include exports of semiconductors used for artificial intelligence.

Following in the footsteps of the United States, the Netherlands also decided to implement similar restrictions. Of all the companies affected by the restrictions imposed by the Netherlands, ASML is the most important. It is the sole manufacturer of ultraviolet lithography machines, which are critical to the production of advanced semiconductors globally.

Now, Japan is also poised to implement sanctions due to pressure from the US and other global trading partners. Nikon and Tokyo Electron are two of the leading companies in the semiconductor manufacturing industry in the country, and their businesses could be affected by the proposed restrictions.

White House national security spokesman John Kirby confirmed that Japanese and Dutch officials and the US government had discussed “a number of issues of importance to all three countries”. According to Kyodo News, Kirby said the talks include “safety and security of emerging technologies” and that once the talks are complete, the US government will make an official announcement.

Implementation of export restrictions by Japan and the Netherlands may take some time. According to BloombergBoth countries need to develop domestic legislation, and finalizing legal arrangements could take months.

In addition to restricting exports to China, the White House has also used its influence to boost domestic chip production. President Joe Biden signed the CHIPS and SCIENCE Act of 2022, which cost $280 billion and included $52 billion in subsidies for semiconductor manufacturing. This has led to companies such as Intel, TSMC, and Samsung either announcing plans or actively building new semiconductor manufacturing facilities in the United States.

Source: Kyodo News through Reuters


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