Dutch and Japanese curbs on chip-equipping China may be tough enough: industry group

Chip industry groups have warned that unless U.S. allies adopt restrictions on semiconductor manufacturing equipment to China that match U.S. regulations, they will be ineffective.

The warning comes after news that the Netherlands and Japan have agreed to limit exports of semiconductor products to China in line with rules imposed by the Biden administration in October. Details of the transaction were not disclosed.

SEMI, which represents the semiconductor and electronics manufacturing supply chain, said it has a shared interest in enhancing US national security and welcomed agreements with Japan and the Netherlands.

However, in a lengthy comment dated 31 January regarding the October regulations, the group expressed concern that allied regulations were not as restrictive as those in the United States.

Even if Japan, the Netherlands, and other allies adopt restrictions on certain tools, unless their international partners agree to broader control over Chinese manufacturing facilities or fabs that produce advanced chips, they will ” It has little effect,” said SEMI. SEMI also said allies should restrict engineers and others from supporting China’s high-end fabs.

If allied controls are less strong, the U.S. will need to license more equipment to Chinese customers unrelated to the military, SEMI said.

US regulations restrict the shipment of certain chip-making tools to China. They are also effectively preventing China’s advanced chip manufacturing plants from accepting American technology and preventing Americans from supporting the fab. The US has created rules to slow Beijing’s technological and military progress.

Without additional restrictions, advanced semiconductor production in China would be limited to “existing equipment, Chinese-made equipment, and other uncontrolled items, benefiting from know-how and services that can be provided by persons outside the United States.” can still occur in ,” wrote SEMI. .

U.S. equipment companies’ share of the Chinese market has declined over the past two years as Chinese firms anticipate new restrictions, he said. The erosion has accelerated since October, with some companies reporting a 20% drop in market share in recent months.

“These sales losses are going to companies in countries not bound by the new rules,” SEMI said, adding that unilateral regulations could cost billions of dollars in sales that would otherwise have been paid to US companies. will be diverted to competitors, he added.

The U.S. Department of Commerce, which issued the October rule and has worked with allies, did not immediately comment.

SEMI has more than 2,500 members worldwide, including leading US equipment manufacturers Lam Research and Applied Materials.

Karen Freifeld