Chip board with flags of China and the Netherlands

Netherlands to block chip exports to China

Image credit: Canva

The Netherlands' government has joined the US and other nations in imposing new restrictions on exports of semiconductor technology to China, citing national security concerns.

The Dutch government has said it will impose export restrictions on the “most advanced” semiconductor technology, revealing the first details of the deal that The Hague and Tokyo struck with the US in January to limit sales to China.

Liesje Schreinemacher, Netherlands’ trade minister, wrote to parliament on Wednesday (8 March) outlining the new measures. 

As a result, companies that want to export semiconductor technology to the Asian superpower will have to apply for licences. These “surgical” measures would only include very high-specification systems for advanced semiconductors, including some of the deep lithography (DUV) tools made by Dutch company ASML.

The restrictions will start being enforced before the summer. 

"The Netherlands considers it necessary on national security grounds to get this technology into oversight with the greatest of speed, the Cabinet will introduce a national control list,"  Schreinemacher said.

The move is the latest development in a long-running technological dispute between Washington and Beijing, as US firms demand more government support to reduce reliance on components produced in Chinese factories.

The US has restricted China’s access to semiconductor technology since at least 2019 when the Trump administration banned Huawei from buying vital US technology. Last October, the Biden administration imposed sweeping export controls on American chipmaking tools to China.

However, for these restrictions to be effective, the US needs other key suppliers to agree to similar controls and has been holding discussions in this regard with Japan and the Netherlands.  

ASML has responded to the news, stressing the rules would only affect certain models.

“Although ASML has not received any additional information about the exact definition of ‘most advanced’, ASML interprets this as ‘critical immersion’,” the company said in a statement, adding it did not expect the rules to have “material effect on our financial outlook that we have published for 2023 or for our longer-term scenario”. 

ASML dominates the market for lithography systems, multimillion-dollar machines that use powerful lasers to create the minute circuitry of computer chips.

The company's most advanced EUV tools have been banned from sale to China since 2019, and the majority of its DUV sales go to relatively less advanced chipmakers. For this reason, the company has stressed it expects sales in China to remain about flat at €2.2bn (£1.95bn) in 2023.

Schreinemacher said the Dutch government had decided on measures "as carefully and precisely as possible ... to avoid unnecessary disruption of value chains".

In December, China launched a trade dispute at the World Trade Organization against the US's chip export control measures, saying the curbs “threaten the stability of the global industrial supply chains”. 

The Asian country is reported to be working on developing a $143bn (£116bn) support package to boost its domestic semiconductor industry. 

In January, E&T analysed the changes that chipmakers have faced in recent months.

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