“Japan adopts US semiconductor export controls”

The Japanese government has “agreed in principle” to join the Netherlands in adopting the US semiconductor export control measures, according to a Bloomberg report. Both countries are said to ban the sale of semiconductor manufacturing equipment capable of fabricating 14nm and more advanced chips to Chinese customers. An official announcement is expected in the coming weeks.

The only Chinese company currently producing 14nm chips is SMIC. Once the curbs are in effect, all Chinese hope to build up domestic advanced semiconductor manufacturing capacity in the near future is lost. Without access to machinery of US companies Applied Materials, KLA and Lam Research, Japan’s TEL and Nikon and ASML and possibly ASMI from the Netherlands, semiconductor activities will be confined to trailing-edge and mature nodes. The Chinese semiconductor industry may respond by doubling down on specialty technologies such as MEMS, power and RF semiconductors.

The Chinese government allocated 150 billion dollars in 2014 to become a global leader in semiconductor technology. These investments kicked off a growth spree, according to SIA data, lifting China’s share in global semiconductor device sales from 3.8 percent in 2017 to 9 percent in 2020, the latter being about the same share as Europe and Japan. In terms of 12-inch-equivalent production capacity, China claimed 24 percent last year, according to market research firm Trendforce.