The US, the Netherlands and Japan are teaming up

The semiconductor shortage caused by the pandemic has affected almost every product that contains a chip, including vehicles. The consequences of this crisis led the US to pass the  $280 billion CHIPS Act, of which $52 billion is intended to subsidize chip manufacturers. "If we've learned anything from the multi-year crisis caused by Covid, it's that we need more resilient supply chains,"  Intel CEO Pat Gelsinger said.

The US has reportedly succeeded in persuading the Netherlands and Japan to restrict China's access to advanced chip-making technology.

According to reports, President Joe Biden's administration has achieved an agreement with the Netherlands and Japan to restrict China's access to advanced lithographic chip production machines.

According to Bloomberg, these two countries leaders have decided to align with US trade policy in some areas, i.e., to impose some of the same trade restrictions on China. This generally refers to the firms ASML and Nikon, which produce sophisticated lithography machines for chip manufacturing.

According to reports, the United States, the Netherlands, and Japan will not publicly disclose the agreement, and its implementation will take "months" while these countries work out the legal intricacies.

"Talks have been going on for a long time, but we will not advertise about it - and even if we do agree on something, it is questionable whether it would be public," said Mark Rutte, the Dutch Prime Minister when asked about the negotiations.

ASML is the only company that holds EUV chip manufacturing technology on the 5nm and 3nm production processes used in the latest smartphones and PCs as of last year. The Biden administration is attempting to halt the rise of domestic chip fabrication in China by restricting access to this technology.

However, Chinese media announced last year that SMIC, the main Chinese chip manufacturer, had begun mass production on the 14-nanometer production process, as well as successfully producing 7-nanometer chips without the assistance of foreign technology.

China has stated that SMIC is working on 5nm semiconductor fabrication, however, it is unclear how the company will do so without access to EUV lithography gear.

Post by Bryan C.