30th Mar 2023

Dutch set to agree to US-led chip controls to China

  • Mark Rutte has said he would only agree with a chips ban to China for national security reasons (Photo: Council of the European Union)
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Japan and the Netherlands are set to agree to join the United States in restricting exports of semiconductor manufacturing equipment to China on Friday (27 January).

Talks between the countries are expected to conclude as early as Friday, with the Netherlands restricting ASML Holding NV from selling machines to China used to make certain types of advanced chips. Japan would impose similar restrictions on Nikon Corp.

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The move would be a major diplomatic victory for US president Joe Biden's administration, which in October announced sweeping restrictions on Beijing's access to US chipmaking technology to slow its technological and military advances. Dutch prime minister Mark Rutte said during a press conference on Friday that details about a ban would be communicated in "a limited way."

A potential export ban of military grade semiconductor technology would "not be focused on a specific country," he said. "And it is very unclear if we decide on policy we would communicate about it visibly."

The United States has been putting pressure on the Netherlands (as well as Taiwan, Japan, and South Korea) to stop exporting technology to China, that would allow the country to produce advanced semiconductors and strengthen its military.

The latest machines from Dutch tech giant ASML, called extreme ultraviolet devices (EUV), were never allowed to be exported to China, but the Americans also want to cut China off from older technology.

Last October, the Americans imposed strict export restrictions on their own chip industry, and increased pressure on allies to do the same. Without Japanese or Dutch cooperation, US companies would face a competitive disadvantage. The US rules, however, have caused confusion in the industry.

Three months in, and it is still unclear how they should be implemented, ASML CEO Peter Wennink said at a press conference on Wednesday, in which he dispelled worries a potential ban would undermine the company's excellent financial performance.

The Dutch foreign ministry did not respond in time for publication. But prime minister Mark Rutte has said he would not agree to new restrictions to protect US interests and said would be motivated only by concerns for national security.

But some in the opposition fear the Netherlands will get caught in the middle of the two feuding superpowers and argue the Netherlands should seek protection from the EU and other EU members. "ASML is important for the European chip industry. So why didn't Rutte take French president Macron and German chancellor Scholz with him," liberal MP Laurens Dassen tweeted, referring to Rutte's visit to Washington on 17 January.

But even if the Netherlands would want to make agreements on this issue in Brussels, there is currently no procedure for this.

Added a quote from Dutch prime minister Mark Rutte after publication of the article on Friday 16:00.


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