Criticism from SEMI: Companies from Japan and Holland do not comply with restrictions on trading chips to China

Criticism from SEMI: Companies from Japan and Holland do not comply with restrictions on trading chips to China

Brussels, 1.2.2023

Immediately after the Netherlands and Japan agreed to curb chipmaker exports to China to comply with rules imposed by the Biden administration in October, SEMI came forward. She worries that the Dutch and Japanese will not comply with the US-imposed restrictions on chip trading.

Even if Japan, the Netherlands and other allies enact restrictions on certain tools, SEMI says they will be „largely ineffective“ unless international partners agree to tighter controls on Chinese factories (fabs) that make advanced chips. SEMI went on to say that the allies must prevent their engineers and others from supporting China’s high-end factories.

In addition, Semi suggested that if allied controls are not so strict, the United States should license more equipment to Chinese customers who are not tied to the military.

US regulations restrict shipments of certain chip manufacturing equipment to China. They prevent China’s advanced chip factories from receiving American technology. The US introduced the rules to slow Beijing’s technological and military advances.

Without the additional restrictions, advanced semiconductor manufacturing in China „will still be able to produce with existing equipment, Chinese-made equipment and other uncontrolled items, while utilizing expertise and services provided by non-US persons“ , SEMI wrote.

According to their analysis, it is clear that US equipment manufacturers‘ share of the Chinese market has declined over the past two years as Chinese companies expected the new restrictions. Erosion has accelerated since October, with some companies reporting a 20% drop in market share in recent months.

„These lost sales are destined for companies from countries not bound by the new rules,“ SEMI said, adding that unilateral controls will divert billions of dollars in sales that would have gone to US companies to competitors.

The US Department of Commerce, which issued the rules in October and has been working with allies, had no comment.

SEMI has more than 2,500 members worldwide, including the leading US manufacturers Lam Research and Applied Materials.