Chip, the United States saves Asml on checks on China
The United States is preparing to apply new restrictions on trade in chip machinery to China. But the Netherlands and Japan will be exempt: Asml and Tokyo Electron can breathe a sigh of relief. All the details
By the end of August the United States will announce a further and more stringent measure to limit trade in microchip manufacturing machinery to China. The new element compared to what had already been anticipated by the press two weeks ago is that Joe Biden's administration will exempt some countries, such as Japan, the Netherlands and South Korea.
The decision is explained by the desire not to disappoint the allies – the Chinese market is an important one -, but will probably have the effect of limiting the impact of the new measure on Beijing, given the great importance of the three countries in the chipmaking supply chain.
ASML AND TOKYO ELECTRON WILL NOT BE SUBJECT TO THE NEW RESTRICTIONS
In concrete terms – as revealed by Reuters -, it means that companies such as the Dutch Asml and the Japanese Tokyo Electron, both manufacturers of machines and systems for the manufacturing of semiconductors, will not have to submit to the new US trade restrictions. However, companies based in Israel, Singapore, Malaysia and Taiwan will have to do so.
The new measure – an extension of the so-called foreign direct product rule – applies in fact to those companies that use American technology in their products and services, even if they are not based in the United States: Asml and Tokyo Electron would have been heavily penalized, but they are been excluded. The exempted nations are more than thirty in total.
Through these trade restrictions, the United States wants to prevent China from obtaining the means and capabilities necessary for the production of advanced semiconductors, which in turn are indispensable for the development of artificial intelligence and supercomputing (technologies that can be used in both the industrial-civil and military).
WHAT THE UNITED STATES HAVE DONE AND WILL DO TO CONTROL TRADE WITH CHINA
The White House began imposing export controls on chips and advanced machinery to China in 2022 and 2023, hitting the business of US companies such as Nvidia and Lam Research. Then, in 2023, he widened the restrictions involving Japan and the Netherlands and it seems – reports Reuters – that he intended to further tighten trade controls and also include South Korea and Germany in the coalition.
Despite the apparent step back, CSIS analyst James Lewis told Reuters that “the United States will not give up technological restrictions on China. The Europeans have obtained a temporary pass." It also seems that Washington wants to tweak the foreign direct product rule and lower the share of content of US origin that is used to determine whether a certain foreign product or service is subject to American controls.
NEW RESTRICTIONS ON 120 CHINESE ENTITIES
In addition, the United States will add approximately one hundred and twenty Chinese entities – such as chip manufacturers and suppliers of electronic design automation machinery and software – to its commercial "blacklist": companies that want to trade with these entities will have to apply for a specific license to the authorities, who most likely will not grant it.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/stati-uniti-nuove-restrizioni-macchinari-chip-cina/ on Thu, 01 Aug 2024 13:17:31 +0000.