China’s Semiconductor Industry Is About to Suffer Another Major Blow

China could be about to suffer another major blow to its chip manufacturing industry as both Japan and the Netherlands are expected to join the US in restricting the country’s access to advanced chipmaking technology.

The US has already dealt a major blow to China’s chipmaking ability, but now, as Bloomberg reports(Opens in a new window), people familiar with the matter claim Japan and the Netherlands have “agreed in principle” to joining the US in restricting exports to China.

Both countries are extremely important to the global chipmaking industry. The Netherlands is home to ASML Holding—the sole supplier in the world of extreme ultraviolet lithography (EUV) photolithography machines used to manufacture the most advanced chips. Japan is home to Tokyo Electron, a key supplier of equipment to fabricate integrated circuits.

It’s currently unclear if both countries will adopt all of the measures imposed by the US or just some of them. However, it’s expected the restrictions imposed will limit China to only being able to buy machinery capable of fabricating 14nm chips. The most advanced chips today are typically 3nm, with 2nm fabrication already being planned for 2025.

Whatever the final decision on export restrictions, expect an angry response from China and potentially some form of retaliatory move by the government. There’s little China can do to circumvent the decision, though. Meanwhile, Chinese companies are already looking to the future, with RISC chips the most likely way forward.