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China Accuses US of ‘Technological Terrorism’ as Chip Curbs Grow

·2-min read
China Accuses US of ‘Technological Terrorism’ as Chip Curbs Grow

(Bloomberg) -- China accused the US of “technological terrorism” in pushing to stop ASML Holding NV and Nikon Corp. from selling key chipmaking technology to the country, in some of its strongest criticism yet of Washington’s efforts.

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Chinese Foreign Ministry spokesman Zhao Lijian lashed out at Washington after Bloomberg News reported the US is lobbying allies to stop the sale of mainstream technology essential for making a large chunk of the world’s chips, expanding a years-long campaign to curb the country’s rise. He didn’t say whether China planned any retaliatory measures in response to the move.

“This is yet another example of the US practice of coercive diplomacy by abusing state power and wielding technological hegemony. It is classic technological terrorism,” Zhao told a regular news briefing Wednesday in Beijing. “This will only remind all countries of the risks of technology dependence on the US and prompt them to become independent and self-reliant at a faster pace.”

The proposed restriction would expand an existing moratorium on the sale of the most advanced systems to China, in an attempt to thwart the country’s plans to become a world leader in chip production. If the Netherlands agrees, it would broaden significantly the range and class of chipmaking gear now forbidden from heading to China, potentially dealing a serious blow to Chinese chipmakers from Semiconductor Manufacturing International Corp. to Hua Hong Semiconductor Ltd.

US Pushes for ASML to Stop Selling Chipmaking Gear to China

American officials are lobbying their Dutch counterparts to bar ASML from selling some of its older deep ultraviolet lithography, or DUV, systems, people familiar with the matter said. These machines are a generation behind cutting-edge but still the most common method used for making certain less-advanced chips required by cars, phones, computers and even robots.

Washington is also trying to exert pressure on Japan to stop shipping the same technology to Chinese chipmakers, one of the people said. Japan’s Nikon competes with ASML in the area.

“Chinese chipmakers have been hoarding second-hand equipment since the Trump era,” said Amir Anvarzadeh of Asymmetric Advisors. Banning the most advanced tools was “clearly not enough to halt China’s advancement in semiconductors, especially since much of the chips used for defense purposes are using geometries that were far less advanced.”

(Updates with details of US trade measures)

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