US, Netherlands and Japan reportedly agree to limit China's access to chipmaking equipment

The Biden administration has reportedly reached an agreement with the Netherlands and Japan to restrict China's access to advanced chipmaking machinery. According to Bloomberg, officials from the two countries agreed on Friday to adopt some of the same export controls the US has used over the last year to prevent companies like NVIDIA from selling their latest technologies in China. The agreement would reportedly see export controls imposed on companies that produce lithography systems, including ASML and Nikon.

Bloomberg reports the US, Netherlands and Japan don't plan to announce the agreement publicly. Moreover, implementation could take "months" while the countries work to hammer out the legal details. "Talks are ongoing, for a long time already, but we don't communicate about this. And if something would come out of this, it is questionable if this will be made very visible," said Dutch Prime Minister Mark Rutte on Friday, responding to a question about the negotiations.

According to Bloomberg, the agreement will cover "at least" some of ASML's immersion lithography machines. As of last year, ASML was the only company in the world producing the extreme ultraviolet lithography (EUV) machines chipmakers need to make the 5nm and 3nm semiconductors that power the latest smartphones and computers. Cutting off China from ASML's products is an effort by the Biden administration to freeze the country's domestic chip industry. Last summer, Chinese state media reported that SMIC, China's leading semiconductor manufacturer, had begun volume production of 14nm chips and had successfully started making 7nm silicon without access to foreign chip-making equipment. China has said SMIC is working on making 5nm semiconductors, but it's unclear how the company will do that without access to EUV machines.

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