US Lawmakers Introduce Bipartisan Bill to Block Chip Tool Exports to China from Allied Nations

A bipartisan group of US lawmakers has introduced legislation targeting the export of semiconductor manufacturing equipment to China, with a particular focus on shipments from allied nations including the Netherlands and Japan, Bloomberg reported. The bill would expand the scope of US restrictions beyond direct American exports, seeking to pressure or require allied country partners to align their export control regimes with US policy. The Netherlands-headquartered ASML is the world's sole supplier of extreme ultraviolet lithography machines, which are essential for manufacturing the most advanced chips. Japan's Tokyo Electron and other Japanese equipment makers are also significant suppliers of chipmaking tools globally. US export controls implemented in 2022 and 2023 restricted American companies from selling advanced chip manufacturing equipment to China. However, some allied country manufacturers have continued supplying equipment below certain performance thresholds, which critics argue provides China sufficient technology to make incremental progress toward advanced chip production. The legislation reflects frustration in Congress with the pace of allied country alignment on chip controls. The Netherlands tightened its own ASML export rules under US pressure in 2023, but lawmakers argue the restrictions do not go far enough and that China continues to acquire tools that, in combination, can approximate more restricted capabilities. China has sharply criticized Western chip export restrictions as technology protectionism and has accelerated domestic investment in semiconductor manufacturing equipment to reduce dependence on foreign suppliers. The IDC data released this week showing Chinese AI chipmakers capturing 41% of China's domestic AI server market suggests those investments are producing results. The bill's prospects in the current legislative calendar are uncertain. Chipmaking equipment manufacturers have lobbied against broad export restrictions, arguing they disadvantage US and allied companies while providing insufficient benefit if China develops domestic alternatives.