US pushing Netherlands, Japan to restrict more chipmaking equipment to China, source says

By Karen Freifeld

(Reuters) – A U.S. official was headed to Japan after meeting with the Dutch government in an effort to push allies to further crack down on China’s ability to produce cutting-edge semiconductors, a person familiar with the matter told Reuters on Tuesday.

Alan Estevez, the U.S. export policy chief, was again trying to build on a 2023 agreement between the three countries to keep chipmaking equipment from China that could modernize its military.

The U.S. first imposed sweeping restrictions in 2022 on shipments of advanced chips and chipmaking equipment to China from the likes of California-based Nvidia (NASDAQ:) and Lam Research (NASDAQ:).

Last July, to align with U.S. policy, Japan, home to chip equipment makers Nikon (OTC:) Corp and Tokyo Electron, curbed exports of 23 types of equipment, from machines that deposit films on silicon wafers to devices that etch out the microscopic circuits.

Then the Dutch government began to regulate Netherlands-based ASML (AS:)’s deep ultra violet (DUV) semiconductor equipment to China and the U.S. imposed restrictions on additional DUV machines to a handful of Chinese factories, claiming jurisdiction because ASML’s systems contain U.S. parts and components. ASML is the world’s top chip equipment maker.

Washington is now talking to allies about adding 11 more Chinese chipmaking factories to a restricted list, the person said. There are currently five factories on the list, the person said, including SMIC, China’s largest chipmaker.

The U.S. also is saying it wants to control additional chipmaking equipment, the person said.

A spokesperson for the U.S. Commerce Department declined comment.

U.S. officials visited the Netherlands in April in a push to stop ASML from servicing certain equipment in China. Under U.S. rules, American firms are barred from servicing equipment at advanced Chinese factories.

But the ASML servicing contracts are still in place, the person said, explaining that the Dutch government does not have the extraterratorial scope to cut them off.

The Chinese Embassy in Washington did not immediately respond to a request for comment.

Sanctioned Chinese telecoms giant Huawei last year came out with a phone powered by a sophisticated chip. The Huawei Mate 60 Pro was seen as a symbol of the China’s technological resurgence despite Washington’s efforts.