Regarding the crackdown on China's chip industry, the US seeks Dutch and Japanese assistance
According to persons with knowledge of the situation, an agreement and completion of the Dutch and Japanese export controls might happen as early as the end of January.
The Biden administration is leading an effort to limit technology exports to China and impede its foray into the chip industry. Important suppliers of semiconductor manufacturing equipment from the Netherlands and Japan are on the verge of joining the effort. According to persons with knowledge of the situation, an agreement and completion of the Dutch and Japanese export controls might happen as early as the end of January. Fumio Kishida, the prime minister of Japan, and Mark Rutte, the prime minister of the Netherlands, spoke with US President Joe Biden about their intentions earlier this month at the White House.In an interview with Bloomberg News on Thursday outside the World Economic Forum in Davos, Switzerland, Rutte said, "I'm fairly sure that we will get there."
The Hague and Tokyo probably won't go as far as Washington's prohibitions, which prevent US nationals from collaborating with Chinese chip manufacturers in addition to restricting exports of machinery built in the US. However, once all three nations take action, Beijing may find itself even more blocked off from the knowledge or technology required to produce the most cutting-edge semiconductors.The majority of chip gear manufacturers are based in the US, while ASML Holding NV, which dominates the market for lithography technology, one of the key processes in making electronic components, is based in the Netherlands. In various machinery categories, Tokyo Electron Ltd. of Japan is a significant adversary of US businesses. It would be nearly difficult for Chinese companies to develop production lines capable of the most cutting-edge chip manufacturing without access to their cutting-edge goods as well as those provided by US companies Applied Materials Inc., Lam Research Corp., and KLA Corp., analysts claim.In accordance with larger market movements, shares of Applied Materials, Lam Research, and KLA all declined by more than 2%.
A National Security Council spokeswoman for the White House declined to comment.
At a routine press conference in Beijing on Friday, China's foreign ministry spokesman Wang Wenbin claimed that the US attempt demonstrated Washington's "selfish hegemonic interest" and that it was "trying to benefit itself at the expense of its allies."
Wang further stated that Beijing "will watch what is occurring and defend our own interests."In an effort to restrict access to particular skills, the Biden administration proposed extensive new regulations in October, including limitations on Americans working for Chinese semiconductor companies and prohibitions on the delivery of the most cutting-edge chipmaking equipment to Chinese customers.
The Commerce Department's rules, which are opposed by certain US semiconductor companies but backed by politicians from both parties, are subject to public comment until January 31. Republicans in Congress questioned in a letter on Wednesday whether the export controls are being effectively implemented, which put pressure on Commerce Secretary Gina Raimondo to push down even harder on Chinese chipmakers.The rising competition between the two greatest economies in the world has made semiconductors a significant arena for conflict. China is the largest single market, and the US is the technology's originator and main supplier. Beijing's dependence has led China to try and lessen its reliance on imports, along with rising efforts by Washington to restrict access to cutting-edge technology and their military application.
Biden believes that by including the Netherlands and Japan in his action against China, it will be more effective. The geopolitical worries for Dutch, Japanese, and some US corporations must be evaluated against losing access to a sizable market.The head of the House Foreign Affairs Committee from Texas, Michael McCaul, said to Bloomberg News, "I commend the Biden administration for working with our partners to apply export controls on equipment used to make advanced semiconductors and am eager to scrutinise the specifics of what comes out of these talks." "Should the consequences not significantly match the constraints already in place, a Republican Congress is ready to use its authority to safeguard U.S. national security and uphold human rights," the statement reads.On Thursday, McCaul and Raimondo are scheduled to meet to talk about the situation. How long it will take the other nations to put their policies into effect is unknown.
In the interview, Rutte added, "It might even be something that just happens without great announcements." There is still confusion. It somewhat depends on how the negotiations with the various nations progress.
Some American businesses were compelled to alert investors that they could lose out on billions of dollars in potential future China income after the US statement in October. Since then, they have maintained that if foreign competitors are permitted to continue operating in China largely unrestrained, it exposes them to losing market share.Tokyo Electron claims that the broad crackdown on its Chinese clients is already harming business, whilst ASML asserts that demand for its most cutting-edge goods elsewhere in the globe can make up for any lost sales from China.
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