US asks Japan and Netherlands to tighten control over chips going to China

(Patria) - A US official traveled to Japan after meeting with the Dutch government in an effort to urge allies to further curb China's ability to produce advanced semiconductors, a person familiar with the matter said on Tuesday, according to Reuters.

Alan Estevez, head of US export policy, was again trying to build on a 2023 agreement between the three countries to keep chip-making equipment out of China that could modernize its military.

The US first imposed strict restrictions in 2022 on shipments of advanced chips and chip-making equipment to China for California-based companies Nvidia and Lam Research.

Last July, to align with US policy, Japan, home to chip equipment makers Nikon Corp and Tokyo Electron, restricted exports of 23 types of equipment and machines.

At that time, the Dutch government began regulating ASML's semiconductor exports to China, and the US imposed restrictions claiming jurisdiction because ASML systems contain American parts and components. ASML is the world's leading manufacturer of chip equipment.

Washington is now discussing with allies adding another eleven Chinese chip-making factories to the restricted list, the source said. Currently, there are five factories on the list, the source said, including SMIC, China's largest chipmaker.

The US also says it wants to control additional chip-making equipment, the source said. US officials visited the Netherlands in April in an attempt to prevent ASML from servicing certain equipment in China. Under US rules, American firms are banned from servicing equipment in advanced Chinese factories. But ASML's service contracts are still in effect, the source said, explaining that the Dutch government has no way to terminate them.

Sanctioned Chinese telecoms giant Huawei last year released a phone powered by a sophisticated chip. The Huawei Mate 60 Pro is seen as a symbol of China's technological revival despite Washington's efforts.