AMSTERDAM/WASHINGTON, March 8 (Reuters) – The Netherlands’ authorities on Wednesday mentioned it plans new restrictions on exports of semiconductor expertise to guard nationwide safety, becoming a member of the U.S. effort to curb chip exports to China.

The announcement marked the primary concrete transfer by the Dutch, who oversee important chipmaking expertise, towards adopting guidelines urged by Washington to hobble China’s chipmaking trade and gradual its navy advances.

The U.S. in October imposed sweeping export restrictions on shipments of American chipmaking instruments to China, however for the restrictions to be efficient it wants different key suppliers within the Netherlands and Japan, who produce key chipmaking expertise, to agree. The allied nations have been in talks on the matter for months.

Dutch Commerce Minister Liesje Schreinemacher introduced the choice in a letter to parliament, saying the restrictions might be launched earlier than the summer season.

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Her letter didn’t identify China, a key Dutch buying and selling companion, nor did it identify ASML Holding NV ASML.AS, Europe’s largest tech agency and a serious provider to semiconductor producers, however each might be affected. It specified one expertise that might be impacted is “DUV” lithography methods, the second-most superior machines that ASML sells to laptop chip producers.

“As a result of the Netherlands considers it obligatory on nationwide safety grounds to get this expertise into oversight with the best of pace, the Cupboard will introduce a nationwide management listing,” the letter mentioned.

A White Home consultant didn’t instantly reply to a request for remark.

Chinese language international ministry spokesperson Mao Ning mentioned on Thursday that China resolutely opposed the Netherlands’ resolution and mentioned Beijing had lodged representations with the Dutch facet.

“We hope the Dutch facet will adhere to an goal and truthful place … act to safeguard its personal pursuits, and never observe the abuse of export management measures by sure nations,” Mao mentioned, with out naming nations.

China has incessantly referred to as america a “tech hegemony” in response to export controls imposed by Washington.

ASML mentioned in a response it expects to have to use for licenses to export probably the most superior phase amongst its DUV machines, however that may not affect its 2023 monetary outlook.

ASML dominates the marketplace for lithography methods, multimillion greenback machines that use highly effective lasers to create the minute circuitry of laptop chips.

The corporate expects gross sales in China to stay about flat at 2.2 billion euros in 2023 – implying relative shrinkage as the corporate expects total gross sales to develop by 25%. Main ASML prospects corresponding to Taiwan Semiconductor Manufacturing Co 2330.TW and Intel Corp INTC.O are engaged in capability expansions.

ASML has by no means offered its most superior “EUV” machines to prospects in China, and the majority of its “DUV” gross sales in China go to comparatively much less superior chipmakers. Its largest South Korean prospects, Samsung and SK Hynix 000660.KS each have vital manufacturing capability in China.

The Dutch announcement leaves main questions unanswered, together with whether or not ASML will have the ability to service the greater than 8 billion euros ($8.44 billion) price of DUV machines it has offered to prospects in China since 2014.

Schreinemacher mentioned the Dutch authorities had selected measures “as fastidiously and exactly as doable … to keep away from pointless disruption of worth chains.”

“It’s for corporations of significance to know what they’re going through and to have time to regulate to new guidelines,” she wrote.

Japan is anticipated to situation an replace on its chip gear export insurance policies as quickly as this week, sources mentioned.

“For nationwide safety causes we continuously evaluation export guidelines, however it doesn’t suggest we’ve determined something at this level,” Japan’s Minister for Economic system, Commerce and Trade (METI) Yasutoshi Nishimura mentioned in parliament when requested about doable restrictions.

A METI official concerned in export controls instructed Reuters there was no plan to announce any adjustments on Thursday or Friday. The official, who spoke on situation of anonymity, was not authorised to speak to media.

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