The Netherlands should seek support from the European Commission (EC) and other European Union (EU) member states for the export of Dutch chip technology to China, argues FME. The business association for the technology industry wants the Netherlands to see the EU take a European stance on export restrictions announced by the United States (US) around chip production machinery to China.
The US wants to limit China's access to advanced chips. The countries have long been embroiled in a battle also known as a chip war. For some time, therefore, the Americans have been imposing all kinds of chip-related export restrictions on Western parties trading with China. This bothers China, which still relies heavily on foreign parties for chip technology. This specifically concerns advanced chips, aimed at artificial intelligence, supercomputers and defence purposes, among others.
ASML also affected
The restrictions also affect Dutch ASML, which produces and supplies machinery for the production of chips. For instance, the Dutch company has long been banned from supplying its advanced extreme ultraviolet lithography (EUV) machines to China. However, the Americans also want to restrict exports of older technology for chip production. This specifically involves deep ultraviolet lithography (DUV) machines.
The US wants the Netherlands and Japan to back export restrictions. Such restrictions could cause ASML a lot of damage. China is an important sales market for the Dutch company. The company saw its sales in China rise 19% to nearly $1.3 billion in the first half of 2022. China is an important sales market for DUV systems.
'The Netherlands will not just sign on to the cross'
Consequently, the Dutch government is reluctant to embrace the export restrictions proposed by the US. Prime Minister Mark Rutte and Foreign Minister Wopke Hoekstra spoke to US President Joe Biden about this last week. The FD reported that Rutte and Hoekstra made no commitments in this conversation about export restrictions towards China around chip technology and manufacturing. Rutte stressed that the Netherlands would not simply "sign by the cross". In doing so, Rutte reiterated a position previously also shared by foreign trade and development minister Liesje Schreinemacher during an interview with Buitenhof.
Accordingly, the talks did not include a final decision on whether to adopt export restrictions imposed by the US on China. However, the cabinet does report having taken 'necessary steps forward' in this regard. What exactly this means is not clear.
Japan also cautious
The US not only wants the Netherlands to impose further export restrictions on China around chips, but is also asking Japan - with Canon and Nikon also a major player in chip production - to do so. Like the Dutch government, the Japanese government is reluctant to do so. Japanese Prime Minister Fumio Kishida and Biden recently spoke on the subject. Following this conversation, Kishida reported that Japan has still not made a decision on tightening export restrictions around chip technology towards China.
FME is therefore now arguing that the Netherlands should seek support from the EC and EU member states. The EU should take a European position around export restrictions of chip technology to China. FME points to the Netherlands' leading position in this field as one of the main suppliers of machinery used in chip production. "In these times of rapid technological developments, digitalisation and geopolitical tensions, national and European strategic autonomy is of great importance," says FME chairman Theo Henrar. "The Netherlands would benefit from a more united and strong EU action."
'Make way for Dutch digital champions'
Henrar: "The digital economy has grown 2.5 times faster than analogue over the past 15 years. Semiconductor and chip technology is at the root of this growth. To ensure our future earning power, it is important to excel as a nation in the global digital economy. There must therefore be ample room for our Dutch digital champions, within the limits set by the EU."
FME wants the Netherlands to seek much more cooperation with serious semiconductor nations surrounding China. Think of South Korea, Taiwan and Japan.
Author: Wouter Hoeffnagel
Image: brookhaven via Pixabay
