TOKYO – Japan’s government on Friday said it plans to restrict exports of 23 types of semiconductor manufacturing equipment, aligning its technology trade controls with a US push to curb China’s ability to make advanced chips.

Japan, home to major global chip equipment makers such as Nikon Corp and Tokyo Electron, did not specify China as the target of the measures, saying equipment makers will need to seek export permission for all regions.

“We are fulfilling our responsibility as a technological nation to contribute to international peace and stability,” Minister of Economy, Trade and Industry Yasutoshi Nishimura told a news conference.

Japan wants to stop advanced technology from being used for military purposes and does not have one specific country in mind with the measures, he said.

When asked about Japan’s new export rules, Chinese Foreign Ministry spokesman Mao Ning said at a briefing: “Politicising, instrumentalising and weaponising economic and technological issues, and artificially disrupting the stability of global production and supply chains will only harm others and harm themselves.”

Still, Japan’s decision is seen as a major diplomatic win for US President Joe Biden’s administration, which in October announced sweeping restrictions on China’s access to US chip-making tech to slow its technological and military advances.

Without the cooperation of industry heavyweights Japan and the Netherlands, the US measures would be ineffective, and its companies would face a competitive disadvantage.

Both the countries in January agreed to join the United States in restricting chipmaking equipment exports to China that could be used to manufacture sub-14 nanometre chips, but did not announce the pact to avoid provoking Beijing, sources earlier said.

Japan has never publicly acknowledged that there was an agreement.

A nanometre, or one-billionth of a metre, refers to a specific semiconductor industry technology, with fewer nanometres generally meaning the chip is more advanced. 

In the Netherlands, the government said in a letter to the country’s Parliament in March that it plans to restrict chipmaking equipment exports. Dutch company ASML Holding dominates the market for lithography systems used to create the minute circuitry of chips.

China, which has accused the US of being a “tech hegemony” because of its export restrictions, urged the Netherlands “not to follow the export control measure by certain countries”. 

Japan said it will impose export controls on six categories of equipment used in chip manufacturing, including cleaning, deposition, lithography and etching.

The restrictions, effective from July, are likely to affect equipment manufactured by at least a dozen Japanese companies, including Nikon, Tokyo Electron, Screen Holdings and Advantest. 

Mr Takamoto Suzuki, head of economic research for Marubeni in China, said the measures will be a blow to Japanese equipment makers given the absence of a strong domestic chip market. “It will undermine the market development of Japanese companies and certainly reduce their competitiveness from a regulatory aspect.”

When asked about the impact, Mr Nishimura said, without elaborating, that he expects limited impact on domestic companies.

Some industry watchers point to potential sales elsewhere.

“If you take a long-term view, the effect will be diminished, with new semiconductor plants coming into operation in places like the United States and Japan,” said Professor Takahiro Shinada from Japan’s Tohoku University.

Japan, which once dominated chip production but has seen its market share slip to about 10 per cent, is still a major supplier of chipmaking machines and semiconductor materials.

Tokyo Electron and Screen make around a fifth of the world’s chipmaking tools, while Sumco Corp and Shin-Etsu Chemical produce most silicon wafers.

Shares of Nikon and Advantest rose 0.8 per cent and 1.9 per cent respectively after the news, broadly in line with the wider market’s 1.1 per cent rise. Tokyo Electron and Screen were little changed.

“We will continue to comply with any rules and work to maximise our results within them,” a Nikon spokesman said.

Tokyo Electron and Advantest declined to comment. REUTERS