If the U.S. allies don't adopt curbs on semiconductor manufacturing equipment to China that are comparable to U.S. controls, they won't be effective, according to a chip industry group.
The Netherlands and Japan agreed to curb chipmaking exports to China in October to align with the rules the Biden Administration imposed in October. SEMI, which represents the semiconductor and electronics manufacturing supply chain, said it had a shared interest in strengthening U.S. national security and welcomed the agreement with Japan and the Netherlands.
In a lengthy comment on the October regulations, the group expressed concern that the curbs would not be nearly as restrictive as the U.S. controls.
SEMI said that if Japan, the Netherlands, and other allies adopt restrictions on specific tools, they will be largely ineffective unless international partners agree to broader controls on Chinese fabrication facilities, or fabs that produce advanced chips. SEMI said that allies need to restrict their engineers and others from supporting China's high-end fabs.
The US should grant licenses for more equipment to Chinese customers that are not tied to the military if the allies' controls are not as strong, after considering foreign availability, SEMI said.
The U.S. rules restrict shipments of certain chipmaking tools to China. They effectively bar China's advanced chipmaking factories from receiving American technology, and keep Americans from supporting the fabs. The rules were created by the U.S. in an effort to slow down Beijing's technological and military advances.
Without the additional restrictions, advanced semiconductor production in China will still be able to occur with existing equipment, Chinese-made equipment, and the other uncontrolled items with the benefit of know-how and services non-U. SEMI wrote that S. persons can provide.
It noted that the U.S. equipment companies' share of the Chinese market has eroded over the past two years, as Chinese companies anticipated the new curbs. It said that the erosion sped up since October, with some firms experiencing a 20% decline in market share in recent months.
These lost sales are destined for firms from countries that are not bound by the new rules, SEMI said, adding that unilateral controls will divert billions of dollars in sales that would have gone to U.S. companies to competitors.
The U.S. Department of Commerce, which issued the October rules and has been working with allies, had no immediate comment.
SEMI has over 2,500 members in the world, including leading U.S. equipment maker Lam Research and Applied Materials.