Netherlands and Japan Join the US in a Chip War Against China

The decision by Japan and the Netherlands to join the US in tightening restrictions on chipmaking equipment exports to China is a setback to Beijing's technical ambitions. Insiders contacted by Bloomberg predict that Japan and the Netherlands will announce their plans to introduce new rules akin to those the US passed in October in the coming weeks. The export of equipment used to make complex semiconductors is restricted by the aforementioned regulations. The Biden administration claims that the limitations are intended to prevent the Chinese military from purchasing advanced chips. As a result, this trilateral alliance would essentially deny China access to the equipment required to manufacture modern semiconductors. Due to export limitations put in place by the US government, American producers Applied Materials Inc., Lam Research Corp., and KLA Corp. were unable to meet demand. The adoption of the export restrictions that the US required for the sanctions to have any effect by the governments of Japan's Tokyo Electron Ltd. and the Netherlands' ASML Holding NV, a leader in lithography, is a significant step ahead. China is unable to create a superior economy on its own. No chance, according to Sanford C. Bernstein analyst Stacy Rasgon. On Monday, December 12, the Chinese Ministry of Commerce announced that the country had lodged a dispute with the World Trade Organization on US export restrictions. Chinese officials have stated that the constraints threaten the integrity of the global supply chain and that the US's justifications for having national security concerns are tenuous. Nevertheless, China's ambitions to dominate the chip manufacturing industry are coming under increasing international scrutiny. According to a report from Bloomberg News from last week, Dutch officials are apparently thinking about imposing new export restrictions on China. According to insiders, the Japanese government agreed to these restrictions recently so that the two countries might cooperate. According to one of the individuals, Japan had to overcome opposition from regional businesses afraid of losing business to China. Nikon Corp. and Canon Inc. are the market leaders in addition to Tokyo Electron. According to Bloomberg, senior US National Security Council officials Tarun Chhabra and Alan Estevez, the under secretary of commerce for industry and security, met with Dutch officials in late November to explore export restrictions. The same topics were also covered during a teleconference between Commerce Secretary Gina Raimondo and Minister of Economy, Trade, and Industry (METI) chief Yasutoshi Nishimura just last week.