Photo/Illutration The national flags of China and the United States are displayed on a printed circuit board with semiconductor chips, in this illustration picture taken on Feb. 17, 2023. (REUTERS)

At the behest of the United States, Japan on July 23 strengthened its export regulations to block China from manufacturing cutting-edge semiconductor products.

The stricter regulations cover 23 equipment items used in film deposition, or the process of forming thin film coatings on substrate material, lithographic exposure and other processes of semiconductor manufacturing.

Exports to China will require the industry minister’s approval for individual equipment items.

As a result, it will take longer to complete export procedures and, in some cases, make it impossible to export items altogether.

Comprehensive approval, which ensures simplified procedures, will be given to exports to 42 countries and regions, including the United States, South Korea and Taiwan.

In 2022, Japan exported semiconductor manufacturing equipment worth more than 4 trillion yen ($28 billion), according to trade statistics released by the Finance Ministry. China was the largest destination with a more than 30-percent share.

The government has not identified the manufacturers of equipment items covered by the strengthened regulations.

But a senior industry ministry official indicated that 10 or so companies, including Tokyo Electron Ltd., Nikon Corp. and Hitachi High-Tech Corp., would be affected.

Equipment for manufacturing conventional semiconductor products, such as those used in automobiles and electric appliances, are not covered by the strengthened regulations.

In October, the U.S. government restricted exports of manufacturing equipment and provision of technology to China over cutting-edge semiconductor products that could be used in military applications.

The United States called for concerted efforts from Japan and the Netherlands, whose companies hold large market shares in semiconductor manufacturing equipment.

Tokyo has fallen into step with Washington’s policy, although industry minister Yasutoshi Nishimura said the strengthened regulations are not targeted at a specific country.

The Netherlands plans to introduce new export regulations on semiconductor manufacturing equipment in September.

China has criticized the moves by the United States and other countries as attempts to split the supply chain in the semiconductor industry.

Beijing in December filed a complaint against Washington’s policy with the World Trade Organization.

On July 3 it announced plans to regulate exports of gallium and germanium, rare metals used in the manufacturing of some advanced semiconductor products, from August.

(This article was written by Takashi Funakoshi and Kanako Tanaka.)

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