Japan will restrict exports of chipmaking equipment because it is in line with US restrictions imposed by China

TOKYO (Reuters) – The Japanese government said on Friday it plans to restrict exports of 23 types of semiconductor manufacturing equipment, matching its controls on technology trade with a U.S. push to limit China’s ability to make advanced chips.

The Minister of Commerce and Industry said in a press release that he will impose export controls on six categories of equipment used in chip manufacturing, including cleaning, deposition, lithography, and etching. It did not specify China as a target for the measures, saying equipment makers would need to obtain export permission for all regions.

“We fulfill our responsibility as a technology country to contribute to international peace and stability,” the ministry said, adding that its goal is to stop the use of advanced technology for military purposes.

The export restrictions, which will take effect in July, are likely to affect equipment manufactured by dozens of Japanese companies, such as Nikon Corp Tokyo Electron Ltd, Screen Holdings Co Ltd and Advantest Corp.

“We expect the impact on domestic companies to be limited,” Industry Minister Yasutoshi Nishimura told a news briefing. “We don’t have one particular country in mind with these measures.”

However, Tokyo’s decision comes after the United States in October imposed sweeping restrictions on exports of chip-making tools to China, citing concerns that Beijing plans to use advanced semiconductors to boost its military power. However, Washington needs Japan and the Netherlands, two major suppliers of such equipment, to join in to make these restrictions effective.

Sources said earlier that Japan and the Netherlands agreed in January to join the United States in restricting exports of chipmaking equipment to China that could be used to make sub-14nm chips, but did not make the agreement public to avoid provoking Beijing. Tokyo has never publicly acknowledged the existence of an agreement.

A nanometer, or billionth of a meter, refers to a specific semiconductor manufacturing technology, with fewer nanometers generally meaning a chip is more advanced.

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The Dutch government said in a letter to the country’s parliament this month that it plans to restrict exports of chipmaking equipment. The market for lithography systems used to create microcircuits for chips is dominated by the Dutch company ASML Holding NV.

China, which has accused the United States of being a “technological hegemon” due to its export restrictions, urged the Netherlands “not to follow export control measures by certain countries”.

Japan, which once dominated chip production but has seen its global market share drop to around 10%, remains a major supplier of chip machinery and semiconductor materials. Tokyo Electron and Screen produce about a fifth of the world’s wafers, while Shin-Etsu Chemical Co Ltd and Sumco Corp. produce most of the silicon wafers.

(Reporting by Tim Kelly and Miho Uranaka; Editing by Christopher Cushing)