President Biden enters agreement with Netherlands and Japan to restrict China from accessing chipmaking equipment

According to reports, the Biden administration has reached an agreement with the Netherlands and Japan to limit China’s access to high-tech chipmaking equipment.

Bloomberg reports that on Friday, representatives from the two countries reached an agreement to implement some of the same export controls the United States has used over the past year to prevent companies like NVIDIA (World Leader in Artificial Intelligence Computing) from having to sell their cutting-edge technologies in China.

Companies like ASML and Nikon, which make lithography systems, would reportedly be subject to export controls as a result of the agreement.

Bloomberg further says the United States, the Netherlands, and Japan have no plans to publicly announce the agreement. Even if the countries agree on the legal framework, it may take months before it is put into effect.

In response to a question on Friday, Dutch Prime Minister Mark Rutte said, “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.”

Bloomberg claims that “at least” some of ASML’s immersion lithography machines will be covered by the agreement.

ASML, which is currently the world’s supplier to the semiconductor industry, has monopolised the market for extreme ultraviolet lithography (EUV) machines used by chipmakers to create the 5nm and 3nm semiconductors that power today’s smartphones and computers. By preventing China from purchasing ASML’s wares, the Biden administration is trying to halt the development of China’s domestic chip industry.

SMIC, China’s largest semiconductor manufacturer, started mass producing 14nm chips and 7nm silicon without using any imported machinery. Despite claims from China that SMIC is working to produce 5nm semiconductors, how the company plans to do so in the absence of EUV machines remains unknown.