US, Netherlands and Japan agree to restrict China’s access to chip manufacturing equipment

The US, the Netherlands and Japan are restricting China’s access to chip manufacturing equipment. SMIC’s progress should slow down significantly.

The Biden administration has reportedly struck a deal with the Netherlands and Japan to restrict China’s access to advanced microchip manufacturing equipment. Officials from both countries agreed on Friday to impose some of the same export controls the United States introduced last year to prevent companies like NVIDIA from selling their latest technology to China, according to a Bloomberg report. The agreement is expected to impose export controls on companies making lithography systems, including ASML and Nikon.

US, Netherlands and Japan restrict China’s access to chip manufacturing equipment

Bloomberg reports that the US, the Netherlands and Japan do not plan to publicly announce this agreement. Moreover, the implementation will take “months”, that is, the time when the countries determine all the legal details. “Discussions have been going on for some time, but we do not communicate on this topic. And if something like that happens, you have to wonder if it becomes visible,” Dutch Prime Minister Mark Rutte said on Friday, when asked about the talks.

SMIK’s progress should slow down significantly

According to Bloomberg, the deal will cover “at least”some of ASML’s lithographic machines. Last year, ASML was the only company in the world to produce the Extreme Ultraviolet (EUV) lithography machines that chipmakers need to produce the 5nm and 3nm semiconductors used in our smartphones and computers. Reducing China’s access to ASML products is a move by the Biden administration to freeze China’s domestic chip industry. Last summer, Chinese media reported that SMIC, the country’s leading semiconductor manufacturer, has started producing 14nm chips and is starting to produce 7nm without having access to foreign equipment. China also said that SMIC is working on the production of 5nm semiconductors,