Japanese Government’s Response
The United States introduced export control measures for chips to China in October this year. In response to the export control of cutting-edge semiconductors to China, the Biden administration of the United States asked allies such as Japan to take the same measures. The United States will negotiate with the governments of relevant countries and strive to reach an agreement as soon as possible.
The report said that in response to the restrictions on China, the United States urged Japan and other allies to keep pace with the United States and introduce similar measures to restrict the export of high-end semiconductors and other products to China.
Against China, the United States plans to work with allies to strengthen the effect of restrictive measures, making it difficult for China to obtain or produce high-end semiconductors. Japan’s Minister of Economy, Trade and Industry announced at a press conference on November 1: “We are communicating with the United States and listening to the opinions of Japanese domestic companies.”
Relevant sources of the Japanese government revealed that after receiving inquiries from the United States, they have coordinated within the government and are discussing what content can be imitated in the United States’ control of China. Japan will also observe the movements of the European Union (EU) and South Korea.
The market size of semiconductor equipment in the Chinese mainland market is estimated to reach US$22 billion in 2022, second only to Taiwan and South Korea, accounting for 22% of the overall.
As of now, the content of the regulation has not been determined, and many related companies in Japan are “evaluating the impact on business in detail.”
Business Impact
China is the world’s largest semiconductor market, and U.S. semiconductor companies such as Intel, Qualcomm, and Texas Instruments account for a very high proportion of their revenue from the Chinese market.
Regarding the above-mentioned measures by the US, Bloomberg previously reported that the US government announced new restrictions on China’s imports of US semiconductor technology, which on the one hand made the relationship between the two countries more tense, and on the other hand, brought the US chip industry, which has been trapped in a decline in demand, to the fore. new complications.
According to the financial report released by the American semiconductor equipment company Fanlin Group (Lam Research) on October 19, due to the impact of the relevant ban, the group’s revenue in 2023 may drop by 2 billion to 2.5 billion US dollars.
Equipment giant Applied Materials lowered its forecast due to the impact of the new rules. Operating income in August-October 2022 will be pulled down by $250-550 million equivalent to 4-8%.
In the context of the rapidly deteriorating semiconductor market, if the business of this huge market in China is restricted, the impact on the performance of various companies will be intensified. People from all walks of life in the United States have successively stated that it is “unfair” for American companies to lose their operating income in China, demanding other countries to implement the same measures.
The “Nihon Keizai Shimbun” mentioned that allies such as Japan may take the same measures as the United States. Japanese semiconductor companies are stepping up their vigilance. A major Japanese semiconductor manufacturing equipment company expressed concern: “If China’s cutting-edge semiconductor production stalls, the demand for the latest high-value-added manufacturing equipment that Japan has an advantage will weaken.”
Not only is it demanding from Japan, the U.S. also wants the EU to impose export controls on China similar to those on Russia. According to a report by Bloomberg on the 1st, the United States plans to make the proposal at a high-level trade forum with the European Union in early December.
US Deputy Commerce Secretary Estevez recently claimed that sanctions against Russia may be used as a model for the West to deal with China. He claimed that the United States will reach an agreement with allies to restrict chip exports to China. However, Hong Kong’s Asia Times quoted experts as saying that the U.S. call is unlikely to be answered by the European Union, which has a strong interest in China’s semiconductor market.
China’s Diplomatic Response
Chinese Foreign Ministry spokesman Mao Ning responded on October 8 that out of the need to maintain technological hegemony, the United States has abused export control measures to maliciously block and suppress Chinese companies.
This practice deviates from the principle of fair competition and violates international economic and trade rules. It not only damages the legitimate rights and interests of Chinese companies, but also affects the rights and interests of American companies.
Mao Ning said that this practice hinders international scientific and technological exchanges and economic and trade cooperation, and will have an impact on the stability of the global industrial chain and supply chain and the recovery of the world economy. The U.S. politicizes and instrumentalizes technological issues and cannot stop China’s development.
Zhao Lijian stressed at a regular press conference that China will continue to work with the international community to oppose the US’s economic coercion and bullying, and jointly maintain the stability of the world economic system, rules and foundation.
We also hope that other countries can make correct judgments independently and independently from their own long-term interests and the fundamental interests of the international community.
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