By Gabby Chen

(JW Insights) May 1 -- China Semiconductor Industry Association (CSIA) expressed its opposition to Japan's potential expansion of export control measures for semiconductor manufacturing equipment, according to its announcement released on April 28.

The CSIA stated that such measures will create greater uncertainty in the global semiconductor industry. It urged the Japanese government to adhere to free trade principles, avoid the misuse of export control measures, and maintain the cooperative relationship between the Chinese and Japanese semiconductor industries.

The following is the full text of CSIA announcement:

On March 31, 2023, the Japanese government announced planned amendments to the Foreign Exchange and Foreign Trade Act to expand the scope of export controls for semiconductor manufacturing equipment to cover 23 types of equipment across six categories. It is the view of the China Semiconductor Industry Association (CSIA) that this export control measure by the Japanese government would bring even greater uncertainty to the ecosystem of the global semiconductor industry and CSIA opposes the act of interfering with global trade liberalization, distorting the balance of supply and demand. CSIA hopes that the Japanese government adhere to the principles of free trade and not abuse export control measures to the detriment of the cooperative relationship between the semiconductor industries of China and Japan.

CSIA has submitted comments to the Japanese Ministry of Economy, Trade and Industry(METI) regarding 23 types of equipment item by item, and the key points are as follows:

-The scope of controlled items is overly broad and far exceeds the internationally accepted list of controlled items causing great hardship to the enterprises concerned;

-The established process supply chain is likely to be affected by the ambiguous formulation of controlled items. To prevent disruptions to the supply chain, it is important to refrain from expanding export controls and limit the number of controlled items;

-The interests of related Japanese companies could suffer significantly as a result of the control measures leading to less profit to support their innovation and technology iteration, thereby undermining the competitiveness of Japanese companies in the international market.

The semiconductor industries in China and Japan are interdependent and mutually reinforcing. China enjoys advantages in upstream raw material products, components and packaging; as the largest semiconductor market, it has abundant semiconductor product application scenarios; while Japan is superior in semiconductor equipment, materials, certain semiconductor products and hardware integration. China and Japan share extensive cooperation in the semiconductor industry, and the demand for equipment and materials from Chinese companies continues to grow, while Japanese semiconductor companies also attach great importance to the Chinese market, and two sides have built solid collaboration and mutual trust between the industries. In the event that the Japanese government is determined to jeopardize the well-established cooperative relationship between the Chinese and Japanese semiconductor industries, the CSIA is committed to safeguarding the legitimate rights and interests of its 900 members and shall call on the Chinese government to take resolute countermeasures.

We hope that the Japanese government could take CSIA's comments into account and facilitate the mutually beneficial development of the semiconductor industries in both countries. We also hope that the semiconductor industries would jointly maintain the existing market-based global division of labor and work together to sustain the prosperity and stability of the global semiconductor industry chain and supply chain.

As always, China's semiconductor industry is committed to openness and cooperation. CSIA calls on all relevant companies, organizations, counterparts and colleagues to speak up with reason in order to mitigate the negative repercussions of this export control amendment on the semiconductor industries in both countries.