Why it matters: After USA-based manufacturers, Dutch and Japanese companies are now preparing a harsher ban on technology exports to China. The Asian country won't have access to any of the machinery needed to make high-performance microchips.
It seems China will soon be unable to manufacture its own advanced microchips. The US government has already imposed an export ban on KLA Corp, Lam Research Corp and Applied Materials, and now it's time for Netherlands and Japan to embrace Washington's decision to completely cut off Beijing from the international technology market for chipmaking machines.
According to people familiar with the matter, in the coming weeks there will be a new announcement coming from Amsterdam and Tokyo: the two capitals will join Washington to extend control over the export of advanced chipmaking devices to China, a move which would spell doom for Beijing's ambitions for a self-made technology future.
In October, the US Department sent specific orders to KLA Corp, Lam Research Corp and Applied Materials Inc., demanding a stop to the export of equipment needed to make semiconductor components with sub-14 nanometer processes to China. If confirmed, the new decisions would add ASML Holding NV and Tokyo Electron Ltd. to the growing list of companies deprived of the ability to do business in the country.
A total export ban imposed on ASML Holding would be especially devastating to China's ambitions, as the Veldhoven-based company is specialized in photolithography machines which are used to produce the most advanced computer chips available today. The Dutch corporation is currently the sole supplier of extreme ultraviolet lithography (EUV) photolithography machines in the world, and it is the most highly valued European tech company with a market capitalization or about $200 billion.
According to Stacy Rasgon, a Sanford C. Bernstein analyst, with the latest export bans in action, "there's no way China can build a leading-edge industry on their own." "No chance," Rasgon remarked. For the time being, no official statements regarding the rumors about the bans are coming from the Dutch and Japanese governments.
It is known, however, that Dutch officials were already planning new export restrictions for high-tech technology to China; the Japanese government agreed to similar restrictions and wanted to act in concert, the rumors say. In November, US government officials were in the Netherlands to discuss a potential export ban, while Commerce Secretary Gina Raimondo discussed the same topic with the head of Ministry of Economy, Trade and Industry (METI) of Japan Yasutoshi Nishimura via teleconference just this past week.