February 21. 2024. 7:25

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Netherlands to introduce export controls on crucial chipmaking technology

On Wednesday (8 March), the Dutch government announced plans to introduce new export controls on chip-making technology following a deal struck with the US and Japan earlier this year aimed at curbing supplies to China.

Dutch Minister for Foreign Trade and Development Cooperation, Liesje Schreinemacher, said this week that the Hague was preparing additional export control measures on advanced semiconductor production equipment.

“Given the technological developments and geopolitical context”, she said, “the government has come to the conclusion that it is necessary for national and international security to expand the existing export control of specific semiconductor production equipment.”

The Netherlands is home to ASML, the world’s leader in lithography machines that produce patterns on silicon, a critical component in the international semiconductor supply chain.

Following substantial political pressure from Washington, the Dutch government agreed in January, together with Japan, to limit exports to China in an attempt to cripple Beijing’s rising technological capacity.

In a letter sent to Dutch lawmakers on Wednesday (8 March), Schrienemacher announced “national additional export control measures under preparation in the field of advanced semiconductor manufacturing equipment.”

The Netherlands justified the move by citing three strategic goals: to prevent Dutch goods from being used for undesirable ends, such as in military applications or weapons of mass destruction; to prevent long-term strategic dependencies; and to maintain Dutch technological leadership.

Based on recent technological and geopolitical developments, Schreinemacher said, the government had concluded that introducing additional control measures were necessary for national and international security.

The measures will apply to specific semiconductor production technologies, such as Deep Ultra Violet (DUV) immersion lithography and deposition.

“The final choice for additional control measures was made carefully and as precisely as possible (surgically) to prevent unnecessary disruption of the value chains and to take into account the international level playing field”, the letter says.

Companies must apply for export licences, with applications assessed case-by-case. Consideration will be based on the risk of these three goals being jeopardised along with other factors, such as the potential deployment of the product, the end user and the destination country.

These measures will be pushed for in a multilateral context, Schreinemacher said, with the Netherlands due to also submit relevant proposals to the Wassenaar Arrangement, a voluntary export control regime established to facilitate information exchange on and promote responsibility in transfers of conventional weapons and dual-use technologies.

The letter notes, however, that the likelihood of consensus on this matter being reached by signatories to the Arrangement is low given that Russia is a participant and would, therefore, in the context of the body’s consensus-based decision-making process, be able to block it.

In a statement released on Wednesday, ASML, the company on which the export control measures were tailored, said it “will need to apply for export licences for shipment of the most advanced immersion DUV systems.”

The company added that it did not expect the measures to have a material effect on its existing financial outlook or long-term projections and noted that the controls would cover only the “most advanced” immersion lithography tools, the export of which has already been subject to restrictions by the Dutch government since 2019.

The announcement is the Dutch government’s first concrete acknowledgement of reports in January that the country had joined the US and Japan in a deal to restrict the export of semiconductor production technologies to China.

The agreement built on a similar set of restrictions introduced by Washington last October as part of the wider US-China “chip war”.

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