Sources: the Biden administration has secured an agreement with the Netherlands and Japan to restrict exports of some advanced chipmaking machinery to China
President Joe Biden's administration secured an agreement with the Netherlands and Japan to restrict exports of some advanced chipmaking machinery …
Japan's subsequent addition of advanced chipmaking equipment to its export-control list shows how allied commitments can be implemented through national rules rather than a single U.S. regime.
First-order effects
Chinese chipmakers seeking covered advanced manufacturing equipment face a narrower set of suppliers as the Netherlands and Japan join U.S. restrictions.
The Netherlands and Japan must apply their own export-control processes to affected machinery sales to China, aligning their equipment policies with the Biden administration's curbs.
Second-order effects
China's chip-sector expansion faces greater pressure to rely on domestically made equipment, consistent with reported requirements for chipmakers to use domestic tools when adding capacity.
U.S. controls gain practical force when the Netherlands and Japan participate, reducing the ability of Chinese buyers to substitute restricted U.S. equipment with tools from those allied suppliers.
Third-order effects
The agreement points to export controls becoming a managed coalition system: Washington's leverage depends on keeping key equipment-producing allies aligned while each retains its own licensing regime.
As controls move from broad tool restrictions toward lists of restricted Chinese factories, access to semiconductor equipment is likely to become more targeted and administratively complex.
The trend: Advanced-semiconductor export controls are shifting from unilateral U.S. restrictions toward coordinated allied limits on the equipment supply chain.
wow, interested to see what guarantees and concessions were made to ASML and Tokyo Electron. for better or worse, govt and tech aligning on national security issues is definitely happening. https://twitter.com/...
Will be eager to hear what we had to do to get the Dutch on board. Concession or coercion? Because they were very much not fans of this idea before. https://twitter.com/...
Geopolitical event of great importance vs 🇨🇳, not least the 🇳🇱 part, given the dependence of TSMC (world's largest & most advanced semiconductor foundry) on Holland's ASML. This also may mean that the US & 🇹🇼 have found a stable balance between 🇹🇼 friendshoring & 🇺🇸 reshoring htt…
Go through the TSMC supplier lists if you don't understand how crippling this is for anyone aiming to make the most advanced chips. https://twitter.com/...
Maybe there will never be a (very) public announcement from the Netherlands, with a lot of fanfare, about what it is doing with regards to coordinating export controls for semiconductor equipment sales to China. Some similarities to COCOM... https://twitter.com/... https://twitte…
Why is it so crucial to bring Japan and the Netherlands on board? Look at how much light-blue (Japan) and orange (Netherlands) are in the chart below. https://twitter.com/... https://twitter.com/...
EXCLUSIVE: The US secured a deal with the Netherlands and Japan to restrict exports of some advanced chipmaking machinery to China in talks that concluded Friday in Washington, according to people familiar with the matter. $ASML with @jendeben https://www.bloomberg.com/...
Meetings are over, the deal is done. Now we wait for details, which will be made public by NL and JP, not Biden team. This is a big deal for the US but it's always stressed any moves would be other countries' sovereign decision, so tough to sell it as a joint action. w/@cagankoc …