On Tuesday, February 7, 2023, the United States, Japan, and the Netherlands have reportedly agreed to implement a new ban on semiconductor manufacturing equipment exported to China. This milestone in the US push to beat China in the race to dominate global tech has been partially initiated by the $52 billion CHIPS Act, which seeks to subsidize domestic chipmaking in America and make it harder for China to access the tech.
The US Department of Commerce, on August 9, 2022, introduced the USD 50 billion CHIPS and Science Act 2022 to strengthen the domestic semiconductor industry, as a part of USD 280 billion capital for research and advanced technological manufacturing. Following the restrictions by the US, Apple revoked its deal of buying Semiconductor chips from China’s Yangtze Memory Corp (YMTC).
US allies Japan and the Netherlands are now joining the US in controlling China’s access to materials for semiconductor technology. The Netherlands is home to ASML, a provider of tools used to fabricate semiconductors, which has a monopoly on key advanced chip-making tools. Furthermore, the US is also considering banning all sales to Chinese telecommunications equipment giant Huawei by US suppliers, including Intel and Qualcomm.
China has limited options to respond to the US' limitations in the semiconductor chip market, as any withdrawal of Chinese goods and services from the global market would be detrimental to the Chinese economy, which is already facing hardship. Giuliani's report from Inside Over further said that China wants to own the technology to make chips which is still a US domain. The US is attempting to regulate the transfer of this technology to China for this reason.
Despite the billions of dollars the Chinese Communist Party (CCP) has put into creating its own chip industry, its vendors still require foreign-made manufacturing equipment, raw materials and other technology. It remains to be seen whether the restrictions imposed by the US, Japan, and the Netherlands will be enough to stop China from accessing the technology it needs to manufacture chips.
0. “US-Japan-Dutch Pact Gives U.S More Control Over China’s Semiconductors Says Expert” Techgenyz, 2 Feb. 2023, https://www.techgenyz.com/2023/02/02/us-japan-dutch-u-s-control-chinas-semiconductors/
1. “Biden enlists Japan & Netherlands to fight US-China chips war” GZERO Media, 1 Feb. 2023, https://www.gzeromedia.com/viewpoint/biden-enlists-japan-netherlands-to-fight-us-china-chips-war
2. “Japan, Netherlands join US in restricting China's access to materials for semiconductor technology” Devdiscourse, 5 Feb. 2023, https://www.devdiscourse.com/article/international/2343551-japan-netherlands-join-us-in-restricting-chinas-access-to-materials-for-semiconductor-technology
3. “Why the Netherlands and Japan Aren't Easy Sells for the Biden's China Chip Ban” Barron's, 8 Feb. 2023, https://www.barrons.com/articles/biden-semiconductor-chip-exports-china-signing-up-key-allies-51675806723
4. “Sanctions won't crush China's hi-tech rise: China Daily editorial” China Daily, 31 Jan. 2023, https://global.chinadaily.com.cn/a/202302/01/WS63da57b4a31057c47ebac5ec.html
5. “Japan, Netherlands join US in restricting China’s access to materials for semiconductor technology” ThePrint, 4 Feb. 2023, https://theprint.in/world/japan-netherlands-join-us-in-restricting-chinas-access-to-materials-for-semiconductor-technology/1354841/