US, Japan close to reach an agreement to limit chip exports to China, despite serious fears from Tokyo of retaliation by Beijing, which could, among other things, limit supplies of graphite, a rare metal used in the semiconductor industry, the Financial newspaper reported Times (FT).
According to the publication, “representatives of the US administration have been engaged in intensive negotiations with their counterparts in Japan (and the Netherlands) for several months to establish additional export control regimes”, including measures “to limit the effects of any retaliation by China."
The tightening of US export controls, which include Tokyo and Amsterdam, “is intended to close loopholes in existing rules and add restrictions that reflect the rapid progress of Huawei and other Chinese groups in chipmaking over the past two years” , the post states.
Washington wants to create problems in China's way of obtaining critical semiconductor manufacturing tools, which could seriously affect the activities of the Dutch company ASML, one of the world's largest producers of lithographic equipment, as well as the Japanese leader in microchip maker Tokyo Electron. The White House intends to unveil new export controls before the November presidential election.
The Chinese side said it “resolutely opposes the abuse of export controls” and called on the “relevant countries” to comply with international economic and trade rules, informs the FT. China will “closely monitor developments in this area and resolutely protect the legal rights and interests of Chinese companies”, the newspaper quoted a representative of the Chinese Embassy in Washington as saying.
The White House and the US Department of Commerce did not comment on the situation. The Japanese Embassy in Washington was not available for comment.