US wins deal with Netherlands & Japan on China chip curbs

US President Joe Biden and Prime Minister of the Netherlands Mark Rutte

US President Joe Biden secured an agreement with the Netherlands and Japan to restrict exports of some advanced chip-making machinery to China on Friday.

The agreement, aimed at undercutting Beijing’s ambitions to build its own domestic chip capabilities, would extend some export controls the US adopted in October to companies based in the two allied nations, including ASML Holding, Nikon Corp, and Tokyo Electron.

The agreement is a victory for Biden, who seeks to constrain Beijing’s military advancement by cutting the country’s access to advanced semiconductors.

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Japan and the Netherlands are poised to join the US in limiting China’s access to advanced semiconductor machinery, forging a powerful alliance that will undercut Beijing’s ambitions to build its own domestic chip capabilities, according to people familiar with the negotiations.

The Netherlands will prevent ASML from selling to China at least some immersion lithography machines, the most advanced kind of gear in the company’s deep ultraviolet lithography line. The equipment is crucial to making cutting-edge chips. Japan will set similar limits on Nikon.

A spokesperson at Nikon declined to comment, saying the company could not speak about something that had not been officially announced. Officials at Tokyo Electron were unavailable for comment when contacted outside regular business hours.

“Talks are ongoing, for a long time already, but we don’t communicate about this. And if something would come out of this, it is questionable if this will be made very visible,” Netherlands Prime Minister Mark Rutte said earlier Friday in The Hague in response to a question about the talks.

“This is such a sensitive topic that the Dutch government chooses to communicate diligently, and that means that we only communicate in a very limited way,” Rutte said.