The EU is joining the U.S. to hinder China's acquisition and production of advanced microchips. “We fully agree with the objective of depriving China of the most advanced chips”, Thierry Breton, the EU’s Internal Market Commissioner, said in a speech at the Center for Strategic and International Studies (CSIS). “We cannot allow China to access the most advanced technologies. You will always find Europe by your side when it comes to ensuring our common security in technology,” Breton added, warning that any action should be “limited to what is necessary from a security point of view”. “I see a very strong alignment between EU and the U.S. on this agenda,” Breton said of restricting China’s access to technologies like microchips, quantum computing and artificial intelligence (AI). Citing successful transatlantic cooperation on 5G telecoms technology and semiconductors, Breton also urged a closer alignment on rare earths to “reduce collective reliance on Asia” despite “differences”. Citing what he called “Chinese activism” in many mineral-rich African countries, Breton said that “we must develop another model, a new type of partnership to secure our supply chains”.
Breton made his remarks just hours before reports emerged that U.S. President Joe Biden had struck a deal with the Netherlands and Japan to restrict exports of some advanced chipmaking machinery to China. The agreement, aimed at undercutting Beijing’s ambitions to build its own domestic chip capabilities, would extend some export controls the U.S. adopted in October to companies based in the two allied nations, including ASML, Nikon and Tokyo Electron. “Talks are ongoing, for a long time already, but we don’t communicate about this. And if something would come out of this, it is questionable if this will be made very visible,” Dutch Prime Minister Mark Rutte said. “This is such a sensitive topic that the Dutch government chooses to communicate diligently, and that means that we only communicate in a very limited way,” Rutte added.
In August, Biden signed the Chips and Science Act to bolster American semiconductor research, development and production through federal subsidies, both to cut China out of chip supply chains and to prioritize domestic manufacturing. The EU is expected to pass its own version, the EU Chips Act, later this year. The legislation hopes to double Europe’s share of global chip manufacturing capacity to roughly 20%. In October, the U.S. restricted exports of high-end semiconductors and chip-making technology to China. The Biden administration has pressed Europe to take similar measures.
Earlier this month, Dutch Trade Minister Liesje Schreinemacher said that the Netherlands would not immediately comply with U.S. restrictions on China, and that it was consulting allies in Asia and the EU. Since 2019, the Dutch government has denied ASML Holding, the Netherlands’ largest company and the world’s leading manufacturer of hi-tech equipment used in producing most advanced chips, permission to ship its most advanced machines to China. However, ASML sold €2 billion worth of older machines to China in 2021, the South China Morning Post reports.
