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Netherlands Previews New Chip Export Controls; Expects to Publish Before Summer

The Netherlands this week announced plans to impose new export controls on advanced semiconductor production equipment, a move the U.S. hopes will align it more closely with American restrictions on exports to China. The new Dutch controls (see 2302160011) will target specific chip technologies “in which the Netherlands has a unique and leading position,” Trade Minister Liesje Schreinemacher said in a letter to the country’s parliament, adding that any additional restrictions should be imposed multilaterally.

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The controls are still “being prepared,” according to an unofficial translation of Schreinemacher’s letter, and leading Dutch chip company ASML said it “will take time for these controls to be translated into legislation and take effect.” During that time, the Netherlands also will propose the restrictions at multilateral export control bodies, including the Wassenaar Arrangement, and at the EU level.

But Schreinemacher stressed that the Netherlands “considers it necessary on national and international security grounds that this technology is brought under control as soon as possible.” She said the Netherlands plans to publish controls before the summer.

The announcement comes after months of discussions between the U.S., the Netherlands and Japan, in which the Biden administration has pushed both countries to align with the sweeping set of U.S. controls from October (see 2210070049, 2212060059 and 2301170015). Although Japan hasn’t yet made an official announcement, U.S. and Japanese officials in January said they were hopeful the two countries would soon align their semiconductor export controls against China (see 2301180022).

The new Dutch controls will be placed on “very specific technologies in the semiconductor production cycle,” Schreinemacher said. She specifically mentioned “the most advanced Deep Ultra Violet (DUV) immersion lithography and deposition” technologies.

“These technologies, in combination with certain other advanced technologies made elsewhere, play a vital role in the production of advanced semiconductors,” Schreinemacher said. “The final choice for additional control measures was made carefully and as precisely as possible (surgically) to prevent unnecessary disruption of the value chains and to take into account the international level playing field.”

The restrictions aren’t expected to “pertain to all immersion lithography tools,” ASML said March 8. “Although ASML has not received any additional information about the exact definition of ‘most advanced’, ASML interprets this as ‘critical immersion’ which ASML defined in our Capital Markets Day as the TWINSCAN NXT:2000i and subsequent immersion systems.”

Schreinemacher also stressed the importance of imposing chip controls multilaterally. She said the Netherlands will submit control proposals at Wassenaar, but the “likelihood of consensus being reached is currently slim,” pointing to Russia’s membership. “The changed geopolitical context is expected to affect the regime, as the Russian Federation is also a member and can block the proposal.”

The country will also look to propose chip controls at the EU level, which could lead to a new EU-wide “licensing requirement” for certain semiconductor items. “The question is whether other countries will (immediately) adopt the Dutch licensing requirement,” Schreinemacher said, adding that “this advanced production equipment for semiconductors is only present in a limited number of countries worldwide.” So for many EU member states, “there is no immediate reason to impose a similar licensing requirement.”

The country is also working “closely with the business community” on the new restrictions. “It is important for companies to know exactly where they stand and that they have time to adapt their business processes to new regulations,” Schreinemacher said.

ASML said it will need to apply for new export licenses as a result of the new restrictions, but expects much of its business to be unaffected. “[W]e do not expect these measures to have a material effect on our financial outlook,” the company said. The chip firm said its customers are “primarily focused on the mature nodes are well served with less advanced immersion lithography tools.”

China criticized the Netherlands' decision, saying it's "interfering" in normal trade between Dutch and Chinese businesses. China hopes the Dutch will "refrain from abusing export control regimes" and uphold the "free and open international trade order," a foreign affairs ministry spokesperson said during a routine March 9 press conference, according to a transcript.