Technology

New Dutch Rules Restrict Semiconductor Equipment Exports Amid US-China Tech Tensions

In a significant move reflecting the growing tensions in the global semiconductor industry, the Netherlands has announced new regulations that will restrict the export of certain advanced semiconductor manufacturing equipment.

New Dutch Rules Restrict Semiconductor Equipment Exports Amid US-China Tech Tensions
  • PublishedJuly 1, 2023

In a significant move reflecting the growing tensions in the global semiconductor industry, the Netherlands has announced new regulations that will restrict the export of certain advanced semiconductor manufacturing equipment. The announcement comes amid increasing US pressure to limit the sale of computer chip technology to China, a key battleground in the ongoing technological arms race.

While the Dutch government has cited national security concerns as the reasoning behind the new regulations, it is hard to ignore the geopolitical context. However, this specific connection to the US-China tech rivalry was not directly acknowledged in the Dutch government’s statement.

China has swiftly responded to the Dutch announcement, expressing its dissatisfaction. The Chinese government argues that the decision is counterproductive, potentially impacting chip production and global supply chains. Mao Ning, the spokeswoman for China’s foreign ministry, criticized the US for its “abuse of export controls” and its attempts to “coerce other countries into imposing a technological blockade against China.”

The stakes in this scenario are high, with a focus on semiconductors used in supercomputing and artificial intelligence applications. This burgeoning sector, estimated at $500bn (£395bn), is predicted to double by 2030. The control of the supply chains—the networks of companies and countries that manufacture these chips—is seen as a significant leverage point for any superpower.

Last year, the US imposed stringent export restrictions on American chip-making tools headed for China, intending to prevent the strengthening of Beijing’s military with American technology. However, for these restrictions to truly be effective, the cooperation of other major suppliers, such as the Netherlands, is vital.

Effective from September 1, the Dutch government’s new regulation will require authorization for the export of specific advanced semiconductor manufacturing equipment. This move directly impacts ASML, the largest company in the Netherlands and the world’s most advanced chip equipment manufacturer.

In response to the new restrictions, ASML assured that it would “continue to comply with applicable export regulations, including Dutch, EU, and US regulations”. The company also expressed confidence that these measures would not have a “material impact” on its finances.

Liesje Schreinemacher, the Dutch Minister for Foreign Trade and Development Co-operation, highlighted the military potential of certain chips. She emphasized that unregulated export poses potential national security risks. With its unique and leading position in this field, the Netherlands carries an extra responsibility in managing this critical issue, she noted.

As this development unfolds, it underscores the complexity of the global semiconductor industry, entwined with geopolitical rivalries and national security concerns. The repercussions of this decision, both for the Dutch domestic industry and the broader tech world, will be closely monitored in the times to come.

Written By
Michael Shield

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