Netherlands not to accept US restrictions on export to China

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The Netherlands will not summarily accept the restrictions imposed by the United States on the exportation of semiconductor-manufacturing equipment and technology to China, Dutch Trade Minister Liesje Schreinemacher said on Monday, revealing that Amsterdam was currently in contact with its European and Asian allies regarding the issue.

In an effort to persuade the Netherlands to impose export restrictions that would further restrict China's access to advanced semiconductors, President Joe Biden will visit Dutch Prime Minister Mark Rutte for talks.

Since the United States Commerce Department unveiled additional export restrictions targeted at China in October, the Biden administration has been attempting to align the Netherlands with its goals. The limitations are meant to restrict China's access to powerful computing chips, the creation and upkeep of supercomputers, and the production of advanced semiconductors.

ASML Holding, the largest Dutch firm in the chips industry and a key supplier to semiconductor equipment makers around the globe, has been in the eye of the storm when it comes to the US-China chips debacle. ASML specializes in producing not the semiconductors, but the extreme ultraviolet (EUV) lithography machines that manufacture the chips.

US giants within the chip industry, such as Lam Research and KLA Corporation, both of which make chip-manufacturing equipment, have suspended sales and services to Chinese chipmakers. Meanwhile, the pressure caused ASML Holding to implore its staff in the United States to stop exporting equipment to China.

Amsterdam had denied ASML permission to export advanced machines to China since 2019 in light of pressure from the Trump administration, though it ended up selling €2 billion worth of older machinery to China in 2021.

ASML underlined that the US regulations could only impact about 5% of its group sales.

The US had "justified worries" about over-reliance on Asia, where 80% of advanced chips are made, and the threat that they could wind up in a military application or being used against the Netherlands, Schreinemacher said.

"We've been talking with the Americans for a long time, but they came up with new rules in October, so that changes the playing field," she explained. "So you can't say that they've been pressuring us for two years and now we have to sign on the dotted line. And we won't."

Moreover, the minister revealed that the Netherlands was holding talks with Japan, South Korea, Taiwan, Germany, and France regarding the issue at hand.

Moreover, Germany is eyeing the Netherlands, as it is economically interested in ASML, as well as ensuring "that if we put a certain technology on a list of products that can't be easily exported, that other countries do too."

This comes amid heightened rivalry between Washington and Beijing in the Indo-Pacific region and across the semiconductor sector. In an effort to match Chinese gains in the field, US President Joe Biden signed legislation in August providing $52 billion in subsidies for domestic semiconductor manufacture.

Additionally, US President Joe Biden signed in September an executive order to carry out more thorough inspections of foreign investment in technology, particularly in semiconductors and supply chains.

The priorities in question include preserving America's leading role in the tech industry, protecting the sensitive data of US citizens, and bolstering the resilience of the domestic supply chain, the White House underlined.

The executive order did not specify Beijing, but it did come around a month after Biden signed legislation bolstering US semiconductor manufacturing to try subverting China.

The US crackdown on the sale of technology to China has already begun to have an impact, with the US chip designer Nvidia disclosing late last year that it had been told by US officials to stop exporting two top computing chips for artificial intelligence work to China.

Global shortages of computer chips, prompted by the coronavirus pandemic and the conflict in Ukraine, have caused production delays on a global scale for technology companies and other manufacturers.

However, as the chip industry has gained increased geopolitical prominence, Intel's move is speculated to be a further step by the United States to try and de-industrialize the European Union.