Japan, Netherlands join US in cutting China's access semiconductor tech

The US, Japan, and the Netherlands are also in discussions to restrict China's access to materials for semiconductor technology and for the manufacture of advanced processor chips which, they claim, can be used in weapons, according to the Geo Politik report.

The Chinese government has protested the move and continues to do so, claiming the west is trying to 'maintain its hegemony' and contain China by abusing export controls. It charges the United States of encouraging other countries of ganging up against China as well.

The US says these restrictions are separate from the retaliatory sanctions it has imposed on China to prevent the latter from getting hands on semiconductor technology. The Americans say they are apprehensive about China using these materials to make weapons and to facilitate the ruling Communist Party's surveillance and human rights abuses.

 

Beijing is looking for a more serious response to the new restrictions. The Chinese Communist Party has invested billions of dollars to develop its own chip industry, but its vendors still need foreign manufacturing equipment, raw materials and other technology. Industry experts say Chinese producers are improving but cannot make chips required for the most advanced smartphones and other products. Effective last December, the Industry and Security Bureau has incorporated rules to formalize the restrictions, the Geo Politik reported.

The Chinese Communist Party (CCP) has invested billions to develop its own chip industry although its vendors still need foreign manufacturing equipment, raw materials and other technology.

The US effective from December last year with its Industry and Security Bureau has incorporated rules to formalize the restrictions. It amended the Export Administration Regulations (EAR) and added thirty-six entities to the Entity List.

It identifies entities which have been involved, are involved, or pose a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States, the report claimed. Now Japan and The Netherlands join the United States to control China's access to materials for semiconductor technology.

Earlier Federico Giuliani's report for Inside Over said that The semiconductor chip market which is currently 500 billion dollars (USD) is expected to double by 2030. So whoever controls or dominates the semiconductor market's supply chain will be a future superpower. The report further states that China wants to own the technology to make chips which is still a US domain. That is why the US trying to control this technology flow to China.

The flow of semiconductor chip technology to China will ultimately be used by China for military strength, Artificial Intelligence (AI) and Super Computers. Giuliani's report from Inside Over further says that China has been exponentially investing to increase its production capacity of these microchips and gain technology for production.

Prior to this, the US Department of Commerce, on August 9, 2022 introduced the USD 50 billion CHIPS and Science Act 2022 to strengthen the domestic semiconductor industry, as a part of USD 280 billion capital for research and advanced technological manufacturing, the Inside Over report claimed.

Giuliani's report further said that following restrictions by the US, Apple revoked its deal of buying Semiconductor chips from China's Yangtze Memory Corp (YMTC). Further, the US is also seeking support from its allies to stop China's market capture. In December 2022 Washington discussed with Japan and the Netherlands how to stop the export of chip-related equipment to China.

A Dutch company Advanced Semiconductor Materials Lithography (ASML) has a monopoly on key advanced chip-making tools. The US has been working on preventing ASML from exporting chip-making devices to China. The report further claims that it will take China a decade to reach ASML's expertise in the field.

China in this scenario does not have many options to deal with the US' restrictions in the semiconductor chip market, because if it decides to revoke its goods and services from the international market then the move will backfire in an already struggling Chinese economy.