Alan Estevez, deputy secretary of the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), said he would fly to the Netherlands this month to try to broker a deal to ban the export of advanced chip equipment to China.
The Financial Times, citing unnamed sources reported on the 13th that Estevez and Tarun Chhabra, the White House national security official who pushed Washington to impose export controls on advanced chips on October 7, will visit the Netherlands this month in hopes of brokering a deal. According to reports, the two countries were close to reaching a preliminary agreement earlier this year to control the export of 10-nanometer chip equipment.
However, the Netherlands’ willingness to cooperate declined after the United States emphasized the need to expand control to the 14nm process (not as advanced as 10nm chips). The report quoted sources as saying that Semiconductor Manufacturing International Corporation (SMIC) has developed a 7-nanometer chip, adding to the urgency for Washington to set a 14-nanometer regulatory threshold. Setting the 14nm threshold will make it difficult for SMIC to develop more advanced chips with cost-effective yields.
The report quoted sources as saying that in a speech in September, U.S. National Security Adviser Jake Sullivan said the U.S. would abandon its existing “sliding scale” strategy, in which the chip technology leader would remain two generations ahead of its rivals, and instead try “The bigger the lead, the better.” This hinted that Biden’s strategy would be more aggressive than some allies expected, and it also frustrated the Dutch government.
Masahiko Hosokawa, a former Japanese trade ministry official, pointed out that EU countries such as the United States, Japan, and the Netherlands had discussed the ban for months before the United States suddenly took the lead in announcing the ban. He said the U.S. decided to preempt it because of the political environment and longer-than-expected negotiations with Europe. He said that Japan’s overall direction is the same as that of the United States, but due to legal restrictions, Japan cannot regulate without international consensus.
Reuters reported that Estevez said in an interview on October 27 that the Biden administration will soon finalize an agreement with its allies to follow up with the United States to restrict China’s access to advanced chip manufacturing equipment.
Asked about how to get allies, especially Japan and the Netherlands, to follow the U.S., Estevez said: “We expect a deal to be finalized in the near future.” He said the limits set with allies would include chips and equipment.
The advanced wafer manufacturing equipment market is mainly dominated by American Kelei, Applied Materials, Colin, the Dutch semiconductor equipment industry leader ASML Holding NV, and Japan’s Tokyo Electron.