Japan will limit exports of chip-making equipment as it aligns with US curbs in China

TOKYO (Reuters) – Japan’s government said on Friday it plans to limit exports of 23 types of semiconductor manufacturing equipment, aligning its technology trade controls with a U.S. push to limit China’s ability to make advanced chips.

Japan, home to major global chip equipment makers such as Nikon Corp and Tokyo Electron Ltd, did not specify China as the target of those measures, saying equipment makers must apply for export permits for all regions.

“We are fulfilling our responsibility as a technological nation to contribute to international peace and stability,” the Ministry of Economy, Trade and Industry said in a statement. It said the aim was to stop advanced technology being used for military purposes.

Industry Minister Yasutoshi Nishimura told a news conference that Japan does not have one specific country in mind with the measures.

But Tokyo̵[ads1]7;s decision is seen as a major diplomatic victory for US President Joe Biden’s administration, which in October announced sweeping restrictions on China’s access to US chip-making technology to slow its technological and military advances.

Without the cooperation of industry heavyweights Japan and the Netherlands, American companies would face a competitive disadvantage.

Japan and the Netherlands agreed in January to join the United States in limiting exports to China of chip-making equipment that can be used to produce sub-14-nanometer chips, but did not announce the pact to avoid provoking Beijing, sources said earlier. Tokyo has never publicly acknowledged any agreement.

A nanometer, or one billionth of a meter, refers to a specific semiconductor industry technology, with fewer nanometers generally meaning the chip is more advanced.

The Dutch government said in a letter to parliament this month that it plans to limit exports of chipmaker equipment. Dutch major ASML Holding NV dominates the market for lithography systems used to make chip minute circuits.

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


The ministry said it will impose export controls on six categories of equipment used in chip manufacturing, including cleaning, deposition, lithography and etching.

The restrictions, effective from July, are likely to affect equipment manufactured by at least a dozen Japanese companies, such as Nikon, Tokyo Electron, Screen Holdings Co Ltd and Advantest Corp.

Takamoto Suzuki, head of economic research for Marubeni in China, said the measures would be a blow to Japanese equipment makers given the absence of a strong domestic chip market.

“It will undermine the market development of Japanese companies and definitely reduce their competitiveness from a regulatory aspect,” he said.

Asked about the impact, Minister Nishimura said, without elaborating, that he expected limited impact on domestic companies.

Japan, which once dominated chip manufacturing but has seen its market share drop to around 10%, remains a major supplier of chipmaking machines and semiconductor materials. Tokyo Electron and Screen make up around a fifth of the world’s chip-making tools, while Shin-Etsu Chemical Co Ltd and Sumco Corp produce most silicon wafers.

Nikon and Advantest shares rose 0.8% and 1.9% respectively on the news, broadly in line with the broader market’s 1.1% gain. Tokyo Electron and Screen were little changed.

The companies did not immediately respond to Reuters requests for comment.

(Reporting by Tim Kelly, Miho Uranaka and Kiyoshi Takenaka; Editing by Christopher Cushing)

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