Japan and Netherlands have barred their native companies to supply critical equipment to China, which may have otherwise helped the latter to develop its own chip ecosystem.
This move is in line with Joe Biden’s ideology of undermining China’s chip production, which had already banned certain US companies from transacting with China, especially those that may help its semiconductor industry.
Blocking Machinery Export to China
Even after the end of Trump’s administration, China is facing trade restrictions continued by the Biden administration – especially in the semiconductor industry. The US has blacklisted several Chinese companies and introduced new restrictions to bar trade with China.
In this pursuit, China started seeking the help of other nations – like the Netherlands and Japan – to continue its operations. These two have now introduced trade restrictions against China that prohibit certain companies from supplying goods to China.
As Bloomberg reported, this move is to “undercut Beijing’s ambition to build its domestic chip capabilities,” as the Dutch company ASML Holding HV and Japanese Nikon Corp are barred from supplying deep ultraviolet lithography machines to China. This equipment is critical for chip manufacturing.
Undermining China’s chip business is to stop it from developing its semiconductors, which it used for advances in AI and machine learning fields of its military. But in this pursuit, the move will also affect the mobile technology industry, where China excels with budget smartphones.
Well, this move may have side-effects too, as warned by ASML’s CEO Peter Wennink – who said that pushing China too much may trigger the country to start developing its advanced technology, especially where it’s blocked – lithography machinery. “That will take time, but eventually, they’ll get there”, said the executive.