China Expresses Alarm Over U.S. Restrictions on Chip Production

Chinese Commerce Minister Wang Wentao expressed concern over US sanctions preventing third-party countries from exporting lithography machines to China. The remarks were made after he had a phone call with his American counterpart, Gina Raimondo, on Thursday (Jan. 11).

Reuters reported that Washington has been allegedly weaponizing export controls to cut off China's access to advanced chips and chip-making tools that could fuel breakthroughs in AI and sophisticated computers for military use. The US also convinced allies with critical suppliers to adopt similar curbs.

"Wang Wentao focussed on the United States' restrictions on third-party exports of lithography machines to China, a (US) investigation into the legacy chip supply chain, and sanctions that suppress Chinese enterprises," Beijing's commerce ministry said in a statement.

China Concerned with US’s Chip-Making Curbs — *(Photo : ANDY WONG/POOL/AFP via Getty Images)*

Wang's discussion with Raimondo also highlighted Beijing's concern at a US Department of Commerce survey into how US companies were sourcing so-called legacy chips like current-generation and mature-node semiconductors as it moved to award nearly $40 billion in subsidies for semiconductor chips manufacturing.

On the other hand, the department said that the survey aimed to reduce national security risks posed by China and focus on the use and sourcing of Chinese-manufactured legacy chips in the supply chains of critical US industries.

Dutch Chip Firm Backs Out of China Chip Deal

One of the Western companies convinced to cease dealing with China was the Dutch chip equipment maker ASML. The company said that the Dutch government revoked an export license covering some of its equipment shipment to China on Jan. 1.

ASML's semiconductor production equipment - including extreme ultraviolet (EUV) lithography machines - has already been restricted and not shipped to China due to recent US export bans.

China was ASML's biggest market in the third quarter of 2023 and was responsible for 46% of the company's sales.

In a press conference, Chinese Commerce Ministry spokesperson Shu Jueting said that Chinese trade officials were "deeply concerned" by the US's alleged "direct involvement" in interfering with the export of ASML's lithography machines.