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The Netherlands’ government on Wednesday said it planned new restrictions on exports of semiconductor technology to protect national security, joining the United States’ effort to curb chip exports to China. 

The U.S. in October imposed sweeping export restrictions on shipments of American chipmaking tools to China, but for the restrictions to be effective, they need other key suppliers in the Netherlands and Japan, who also oversee key chipmaking technology, to agree. The allied countries have been in talks on the matter for months. 

Dutch Trade Minister Liesje Schreinemacher announced the decision in a letter to parliament, saying the restrictions would be introduced before the summer. 

Her letter did not name China, a key Dutch trading partner, nor did it name ASML Holding NV, Europe’s largest tech firm and a major supplier to semiconductor manufacturers, but both will be affected. It specified one technology that would be affected: “DUV” lithography, the second-most advanced machines that ASML sells to computer chip manufacturers. 

“Because the Netherlands considers it necessary on national security grounds to get this technology into oversight with the greatest of speed, the Cabinet will introduce a national control list,” the letter said. 

ASML said in a response it expected to have to apply for licenses to export the most advanced segment among its DUV machines, but that would not affect its 2023 financial guidance. 

ASML dominates the market for lithography systems, multimillion-dollar machines that use powerful lasers to create the minute circuitry of computer chips. The company expects sales in China to remain about flat at $2.3 billion in 2023 – implying relative shrinkage as the company expects overall sales to grow by 25%. Major ASML customers such as Taiwan Semiconductor Manufacturing Co. and Intel are engaged in capacity expansion. 

ASML has never sold its most advanced “EUV” machines to customers in China, and the bulk of its DUV sales in China go to relatively less advanced chipmakers. Its biggest South Korean customers, Samsung and SK Hynix, both have significant manufacturing capacity in China. 

The Dutch announcement leaves major questions unanswered, including whether ASML will be able to service the more than $8 billion worth of DUV machines it has sold to customers in China since 2014. 

Schreinemacher said the Dutch government had decided on measures “as carefully and precisely as possible … to avoid unnecessary disruption of value chains.” 

“It is for companies of importance to know what they are facing and to have time to adjust to new rules,” she wrote.  

Japan is expected to issue an update on its chip equipment export policies as soon as this week.
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Add a top U.S. intelligence official to the list of Americans expressing concern about Chinese-made technology and Chinese social media platforms like TikTok. 

General Paul Nakasone, who heads both the U.S. Cyber Command and the National Security Agency, told lawmakers Tuesday there are multiple reasons to be wary of China’s rapid expansion in cyberspace, calling Beijing “a very formidable foe.”

“TikTok concerns me for a number of different reasons,” Nakasone said during a Senate Armed Services Committee hearing. “One is that the data that they have. Secondly is the algorithm and the control. Who has the algorithm?”  

Third, he said, “is the broad platform” both for unleashing potential influence operations but also for the ability to give China a way to “turn off the message.” 

Last month, the United States moved forward with plans to ban TikTok — a social media app used by more than 100 million Americans — from government devices. Some U.S. lawmakers have called for giving U.S. President Joe Biden the ability to ban use of the social media app nationwide. 

Others, however, object to giving Biden the ability to issue a blanket nationwide ban, arguing TikTok is only a small part of a larger issue.  

“The threat that everyone is talking about is TikTok, and how it could enable surveillance by the Chinese Communist Party or facilitate the spread of malign influence campaigns in the U.S,” Democratic Senator Mark Warner told reporters.”Before TikTok, however, it was Huawei and ZTE, which threatened our nation’s telecommunications networks. And before that, it was Russia’s Kaspersky Lab.”

“We need a comprehensive, risk-based approach that proactively tackles sources of potentially dangerous technology before they gain a foothold in America,” he said.

The Restrict Act, being pushed by Warner and others, would establish a rule-based process — informed by the U.S. intelligence community and directed by the Department of Commerce — to identify and address foreign technological threats. 

For its part, TikTok’s parent company, ByteDance, has dismissed concerns it would improperly use user data as “political theater.” 

But concerns about Chinese companies and Chinese technology keep growing. 

On Sunday, The Wall Street Journal reported U.S. defense officials are worried that  Chinese-made ship-to-shore cranes used at many of America’s ports could be used to spy on materials being shipped in and out of the U.S. 

“Communist China has monopolized the port crane industry, and I will continue to spearhead efforts to decouple from the regime in Beijing and incentivize the near-shoring and reshoring of our strategic manufacturing capabilities,” Republican Congressman Carlos Gimenez told VOA when asked about the potential for Chinese espionage at U.S. ports. “I will fight to protect our critical infrastructure from the CCP’s espionage tactics.”

Tensions also have been rising since the U.S. shot down what it identified as a Chinese spy balloon last month after it had traveled across much of the continental United States.

And Biden is expected to issue an executive order in the coming days that would tighten rules on the ability of U.S. companies to invest in China. 

China’s Foreign Minister Qin Gang chastised the U.S. Tuesday, telling reporters in Beijing that Washington’s China policy has “entirely deviated from the rational.” 

But Nakasone told lawmakers that politicians and businesses alike would be smart to be careful about how they make use of Chinese-made platforms and technology. 

“What I would do is ensure that the areas that are most sensitive to our operations are well-sensored, and I have the confidence that’s what’s being utilized there. I understand where that information may be going,” the CYBERCOM commander said.  

“I would take a very, very hard look at anything that would come from an adversarial nation,” Nakasone said, though he acknowledged it would be “very difficult” to proceed with an all-out ban of Chinese products. 

“So much of what we do is based upon international trade,” he said, “and China has the corner on some things.”
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