Japan to restrict chip equipment exports amid China fears

Japan’s government has announced plans to restrict exports of 23 types of semiconductor manufacturing equipment, aligning its technology trade controls with a US push to curb China’s ability to make advanced chips.

The Economy, Trade and Industry Ministry said in a press release on Friday that it will impose export controls on six categories of equipment used in chip manufacturing, including cleaning, deposition, lithography and etching. It did not specify China as the target of those measures, saying equipment makers will need to seek export permission for all regions.

“We are fulfilling our responsibility as a technological nation to contribute to international peace and stability,” the ministry said, adding that its goal was to stop advanced technology from being used for military purposes.

The export restrictions, which will come into force in July, are likely to affect equipment manufactured by a dozen Japanese companies, such as Nikon Corp, Tokyo Electron Ltd, Screen Holdings Co Ltd and Advantest Corp.

“We expect the impact on domestic companies to be limited,” Japan’s Industry Minister Yasutoshi Nishimura said at a news briefing. “We don’t have one specific country in mind with these measures.”

Tokyo’s decision, nonetheless, comes after the US in October imposed sweeping restrictions on chipmaking tool exports to China citing concerns that Beijing planned to use advanced semiconductors to enhance its military power. Washington, however, needs Japan and the Netherlands, which are key suppliers of such equipment, to join it to make those restrictions effective.

Japan and the Netherlands in January agreed to join the US in restricting chipmaking equipment exports to China that could be used to manufacture sub-14 nanometre chips, but did not announce the pact to avoid provoking Beijing, sources earlier said. Tokyo has never publicly acknowledged that there was an agreement.

A nanometre, or one-billionth of a metre, refers to a specific semiconductor industry technology, with fewer nanometres generally meaning the chip is more advanced.

The Netherlands’ government in a letter to the country’s parliament this month also said it plans to restrict chipmaking equipment exports. Dutch company ASML Holding NV dominates the market for lithography systems used to create the minute circuitry of chips.

China, which has accused the US of being a “tech hegemony” because of its export restrictions, urged the Netherlands “not to follow export control measure by certain countries”.

Japan, which once dominated chip production but has seen its global market share slip to about 10 percent, is still a major supplier of chipmaking machines and semiconductor materials. Tokyo Electron and Screen make about a fifth of the world’s chipmaking tools, while Shin-Etsu Chemical Co Ltd and Sumco Corp produce most silicone wafers.