Japan Joins US, Netherlands In Chipmaking Tech Export Crackdown

Japan's Ministry of Economy, Trade, and Industry plans to enact export restrictions on 23 technologies used in the production of semiconductors.

The move comes amid intense pressure by the US to cut off China's supply of chipmaking equipment, and follows a similar decision by the Dutch government earlier this month.

"We are fulfilling our responsibility as a technological nation to contribute to international peace and stability," Japanese Trade Minister, Yasutoshi Nishimura, said during a press conference, according to Reuters.

Unlike the US, which has enacted sweeping export restrictions targeting Chinese chipmakers and government institutions, Japan's export controls are reportedly being applied on its own terms. The rules, which are scheduled to go into effect in July, will require Japanese semiconductor equipment and materials suppliers to obtain permission before exporting kit to any region. This means buying chipmaking goods from Japan is about to get a lot harder for everyone — not just China.

The approach mirrors that of The Netherlands, which specifically avoided naming China, and instead focused on preventing sensitive technologies from being used for undesired military applications by foreign powers.

Nonetheless, the decision represents a victory for the US. While the Biden Administration enacted stiff export controls barring many American equipment vendors from doing business in China without permission, it lacked the authority to prevent other nations from acquiring chipmaking kit elsewhere. In the months that followed, the US has engaged in a pressure campaign to convince its allies to join its cause.

• Smugglers busted sneaking tech into China
• Korea passes tax break-driven 'Chips Act' as protectionism fears mount
• Netherlands joins US blockade of Chinese chip industry
• US bans good for Chinese chipmakers, and bad for us, says Taiwanese rival

Had the US failed to convince the Dutch and Japanese, the two countries would have represented a considerable hole in the Biden Administration's blockade.

While Japan's semiconductor chip industry is nowhere as large as Taiwan's or South Korea's, it remains a key supplier of manufacturing equipment, including deep ultraviolet lithography (DUV) machines used to produce chips down to about 10nm. Two of the largest producers of this tech include Japanese optics and camera makers Canon and Nikon.

But while Japan has joined the US and Netherlands in spirit, it's worth noting that the export controls won't necessarily mean Chinese chipmakers will be completely cut off. None of the restrictions announced so far represent an outright ban on trade with China. Rather, chipmakers must get permission from regulators prior to selling equipment or services.

The economic impact of the decisions remains to be seen. According to Reuters, Nikon expects the sale of at least two of its lithography machines will be restricted by the new rules. These machines can fetch tens or hundreds of millions of dollars, so it's a pressing point for the companies involved. ®