TAIPEI (Taiwan News) — Washington is trying to get other allies on board in restricting cutting-edge semiconductors and related technology exports to Beijing as tensions between the U.S. and China continue to simmer.
Sources told Nikkei that Japan has begun internal talks on the matter after a request from the U.S. Tokyo is mulling which chip restrictions could be taken up, while also looking to see how other American allies such as the EU and South Korea respond, the report said.
On Oct. 7, the U.S. Commerce Department issued new guidelines that require U.S. chipmakers or equipment manufacturers to apply for a license from the department to export chips or chipmaking equipment, which could be used in modern weapons systems, to China.
“We were talking to our allies. No one was surprised when we did this, and they all know that we’re expecting them to cover likewise,” Nikkei cited Alan Estevez, undersecretary of commerce for industry and security, as saying at a think tank event in the U.S. last Thursday (Oct. 27).
Across the global chip sector, both Taiwan and South Korea currently account for about 20% of the market, followed by Japan at 15% and the U.S. at 12%, Nikkei said. Some American companies have been keen to see other countries adopt similar export restrictions, saying that it’s unfair for only U.S. companies to miss out on Chinese business, per Nikkei.
The new Washington restrictions also prevent Americans from working at or conducting business with Chinese chip companies. U.S. engineers who were working at chip facilities in China are beginning to return home, per the report. Critical Dutch semiconductor tool manufacturer ASML Holding has informed its American employees to stop servicing clients in China, according to the outlet.
Nikkei cited one industry group’s estimate that the Chinese market for chipmaking equipment is around US$22 billion (NT$710 billion) this year, representing 22% of the global market, trailing only Taiwan and South Korea.
Meanwhile, Japan also specializes in advanced chip equipment, so export curbs to China could affect the bottom lines of Japanese companies in the sector. Nevertheless, Nikkei said the chip sector in Japan is preparing for the possibility of similar export restrictions.
