Japan joins US chip restrictions against China

Japanese Economy and Trade Minister Yasutoshi Nishimura

The Japanese government is trying not to make the new export controls appear as a measure against China.

(Photo: AP)

Tokyo The Japanese government intends to control the export of production equipment and technologies for semiconductor manufacturing more closely in the future. Even if the Japanese government did not name China in its announcement on Friday, it is implementing an agreement with the USA and the Netherlands on stricter export controls for production technologies for high-performance chips.

The trilateral agreement is part of the US attempt to slow down the development of the Chinese chip industry in the escalating great power dispute. The US not only restricted the supply of state-of-the-art chips to China for domestic industry, but also for companies from other countries that use US patents. In addition, Washington urged the major foreign suppliers of process technology, Japan and the Netherlands, to tighten export controls themselves.

One of the most important manufacturers of systems for so-called DUV lithography is ASML from the Netherlands. This type of photolithography is required for the manufacture of semiconductors with structures in the single-digit nanometer range. Japan, in turn, has several companies such as Tokyo Electron and Advantest, which are among the top exporters of chip technology to China.

The Dutch government intends to present its measures in the coming months. Japan, the US’s closest Asian ally, is now leading the way. The government adds 23 products to the foreign exchange and foreign trade control law. However, the Japanese government is trying not to make this step appear as a measure against China.

Economy and Trade Minister Yasutoshi Nishimura said on Friday: “These export controls apply to all regions and are not directed against a specific country.” The government wants to check whether there is a risk of military misuse.

Container port in Tokyo

The Japanese government is implementing the agreement with the USA and the Netherlands on stricter export controls for production technologies for high-performance chips.

(Photo: dpa)

In future, exports of goods from the affected areas will first have to be approved by the government. Only countries that are among Japan’s preferred trading partners can continue to shop in Japan without an export license.

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In addition to the European Union, these include the chip stronghold of Taiwan in Asia and the city-state of Singapore, in which semiconductors are also manufactured. In the case of China, the Japanese government can now decide which plants and products may be supplied to which companies.

With this measure, Tokyo is creating leeway in the technology conflict between the USA and China in order to protect its own important economic interests in the People’s Republic. Because the interpretation of the rules is the responsibility of the Ministry of Economic Affairs.

Japan wants to keep its neighbor China as a trading partner

China is the island nation’s most important Asian trading partner – and also the Japanese chip industry. Tokyo Electron, for example, makes around a quarter of its sales in China. And the industry doesn’t want to completely lose China as a customer. In the case of mature chip technologies, which are used in cars or household appliances, for example, the goods should continue to get from Japan to China.

>> Read here: Europe’s technology dispute with China is widening

The industry is already taking precautions: Some machine builders have started to technically prevent the further delivery of high-precision machines to Chinese companies that are on the blacklist. Starting this year, the German-Japanese machine tool manufacturer DMG MORI, based in Japan, will be delivering not only its Japanese, but also its German machines with a GPS tracking system and motion sensors

In this way, the machines and the company can immediately detect any movement in the system. If the machines are then removed from the registered location, they switch off automatically. A code is required for re-commissioning, which must be entered by a specialist from the manufacturer.

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