The Netherlands will restrict semiconductor equipment exports in response to US pressure.
It comes as a result of US pressure to limit the sale of computer chip technology to China.
The Dutch government, however, did not identify this as a justification, instead stating that the action was conducted for national security reasons.
According to the Chinese government, the decision was “not in the interests of any party” and would have an impact on chip production and supply chains.
China’s foreign ministry spokeswoman, Mao Ning, said the country opposed the US’s “abuse of export controls” and “use of various pretexts to win over and coerce other countries into imposing a technological blockade against China.”
The United States is competing with China for control of the supply of semiconductors, particularly certain computer chips used in supercomputing and artificial intelligence.
Such chips have spawned a $500 billion (£395 billion) business, which is anticipated to treble by 2030, and it is believed that whoever controls the supply chains – the network of firms and countries that manufacture the chips – holds the secret to becoming an unrivaled powerhouse.
To prevent its technology from being used to enhance Beijing’s military, the US slapped broad export restrictions on shipments of American chipmaking tools to China in October last year.
However, in order for the US limitations to be effective, other significant suppliers, such as the Netherlands, must join forces.
The Dutch government said that beginning September 1, the export of “certain advanced semiconductor manufacturing equipment” will require authorization.
The action will have a particularly negative impact on ASML, the country’s largest company and the world’s largest and most advanced chip equipment manufacturer.
According to ASML, it would “continue to comply with applicable export regulations, including Dutch, EU, and US regulations.”
It also stated that it did not anticipate the restrictions having a “material impact” on its finances.
The United States is tightening restrictions on chip sales to China.
How ASML became Europe’s most valuable technology company
According to Liesje Schreinemacher, Minister for Foreign Trade and Development Cooperation, certain chips “can make a key contribution to certain advanced military applications” because of how they can be used.
“The uncontrolled export of goods and technologies therefore potentially poses national security risks,” she noted. “The Netherlands bears an extra burden in this regard because it holds a unique, leading position in this field.” This additional step, like the export control policy in general, is country-neutral.”