Japan, Netherlands Agree to Limit Exports of Chip-Making Equipment to China

The agreement comes in the wake of Washington’s decision in October to impose expansive export restrictions on advanced chips and equipment manufactured by U.S. companies, and was reported earlier by Bloomberg. The agreement hasn’t been formally announced by any of the three countries, which another person familiar with the situation said was out of concerns by Japan and Netherlands about potential retaliation by China.

Under the rule announced by the U.S. last year, U.S. chip makers are required to obtain a license from the Commerce Department to export certain chips used in advanced artificial-intelligence calculations and supercomputing that are required for modern weapons systems. 

Under the agreement reached Friday, the Netherlands will bar

ASML Holding

NV, a Dutch maker of photolithography machines, from selling to China at least some immersion lithography machines, the most advanced kind of gear in the company’s deep ultraviolet lithography line. The equipment is essential to making cutting-edge chips. Japan will set similar limits on

Nikon Corp.

, according to one of the people familiar with the discussions.

President

Biden

himself met with the leaders of the two countries in recent weeks to discuss the measures. 

Japanese Prime Minister

Fumio Kishida,

during his visit to the White House on Jan. 13, agreed with Mr. Biden to increase security cooperation to counter China’s military buildup and discussed limiting exports of chips and chip-manufacturing equipment. On Jan. 17, Dutch Prime Minister

Mark Rutte

visited Mr. Biden at the White House.

The support of the Japanese and Netherlands governments is critical for the success of the U.S.’s export-control policy because of the importance of a small number of semiconductor-manufacturing equipment makers from the two countries, which include ASML, Nikon and

Tokyo Electron Ltd.

Friday’s meeting was led by national security adviser

Jake Sullivan

and included Japanese and Dutch officials such as Takeo Akiba, Mr. Kishida’s top national-security adviser. Others involved from the U.S. were

Alan Estevez,

undersecretary of Commerce for industry and security and

Tarun Chhabra

of the National Security Council. 

​​

Yasutoshi Nishimura,

Japan’s minister of economy, trade and industry, said Friday that Japan was discussing further export controls with the U.S. but declined to give details. 

Even as allies like the European Union, Japan and South Korea are working increasingly closely with Washington to counter China’s technological advancement, the countries’ heavy reliance on business with China makes them cautious in implementing policies that restrain their companies. 

“You will always find Europe by your side when it comes to ensuring our common security in technology,”

Thierry Breton,

the European Union’s market commissioner, said during a speech in Washington Friday. “But action should be limited to what is necessary from a security point of view, and done in full, transparent and open partnership with Europe.”

A U.S.-based spokesman for ASML said the company was aware of the agreement reached Friday but didn’t have additional details, and said it was too early to assess the impact on the company. 

A representative of Nikon, which makes lithography machines used in chip manufacturing and could be affected by stricter controls, said the company does business in China insofar as it is permitted and hasn’t heard anything from the government about stricter regulation.

—Peter Landers contributed to this article.

Write to Yuka Hayashi at [email protected] and Vivian Salama at [email protected]