Netherlands abides, Japan complies: US anti-China chip act on the go

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Washington reached an agreement with the Netherlands and Japan to force anti-China chip restrictions, which limits both countries' exports of advanced chip-making equipment to Beijing as the US furthers its hostility against the Asian giant's semiconductor industry.

According to a Bloomberg report, the agreement aims to weaken China's aspiration to develop domestic "chip capabilities".

The deal "would extend some export controls the US adopted in October to companies based in the two allied nations, including ASML Holding NV, Nikon Corp., and Tokyo Electron Ltd," the report added.

The news site noted, citing sources informed of the matter, that there are plans to publicly announce the restrictions and that the execution of the export limits could take several months while the two allies conclude the legal process.

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“Talks are ongoing, for a long time already, but we don’t communicate about this. And if something would come out of this, it is questionable if this will be made very visible,” said Dutch Prime Minister Mark Rutte last Friday upon being asked about the details of the talks.

“This is such a sensitive topic that the Dutch government chooses to communicate diligently, and that means that we only communicate in a very limited way,” Rutte added.

Advanced Semiconductor Materials Lithography or ASML is a dutch company that specializes in producing not the semiconductors, but the extreme ultraviolet (EUV) lithography machines that manufacture the chips.

ASML currently holds a global monopoly on EUV production, being the only company in the world to make them, and supplies its products to the world's largest chip maker, Taiwanese TSMC.

The current agreement instates that the Netherlands will restrict ASML's imports of some immersion technology, "the most advanced kind of gear in the company’s deep ultraviolet lithography line," while Japan will implement similar control over Nikon.

ASML: US measures will affect us all

The CEO of ASML Holding NV Peter Wennink stated that the US-led export restrictions against Beijing could lead China to develop its own domestic chipmaking technology, ditching the reliance on imports.

In an interview for Bloomberg on Wednesday, Wennink said the chip manufacturers in China “have to compete” against global competitors, driving them to import non-Chinese equipment.

However, Wennink added, "If they cannot get those machines, they will develop them themselves. That will take time, but ultimately they will get there.”

“The laws of physics in China are the same as here,” Wennink stressed.

Read more: US sanctions on chips not to hamper China military capabilities

“The more you put them under pressure, the more likely it is that they will double up their efforts” in developing lithography machines that can directly compete with those of ASML, he noted.

Earlier in December, China filed a case with the World Trade Organization, hitting back against US export sanctions on microchips, further fueling the tech war between Washington and Beijing.

China's ministry of commerce said its WTO complaint was a legal and necessary measure to defend its "legitimate rights and interests."