U.S. Commerce Secretary Gina Raimondo, Japanese Minister of Economy , Trade and Industry Ken Saito and South Korean Minister of Trade, Industry and Energy Ahn Duk-geun discussed supply chain cooperation at their first trilateral meeting in Washington.

In a joint statement after the meeting, Raimondo and his counterparts made an implicit reference to China, for example raising “concerns about recent non-market measures” that risk disrupting supplies of critical minerals.

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The US and Japan have different views on tightening technology restrictions on China. Photo: Applied Materials

Washington, Tokyo and Seoul have agreed to focus on supply chain reliability and sustainability, not just cost, in efforts to support their respective domestic semiconductor industries.

However, the parties did not mention tightening sanctions against Beijing. Nikkei Asia said that the US and Japan have different approaches to this issue.

Washington is calling for more drastic measures including restrictions on maintenance and inspection services for existing chipmaking machinery.

Chinese manufacturers have been stockpiling equipment and components ahead of the current controls, with Chinese customs data showing a surge in imports of chipmaking equipment from Japan and the Netherlands just before the restrictions were implemented.

While the US typically bars American engineers from developing and manufacturing advanced chips in China, Japan’s curbs are aimed at preventing technology from being transferred across borders. It would be difficult to impose new restrictions on facilities that companies have already set up in China to provide maintenance services.

Some observers also see the possibility that the US could try to further squeeze China's chip manufacturing by targeting the materials used to make them - an area where Japan is a major player.

Tokyo fears that if it expands its control, Beijing could retaliate by cutting off supplies of vital minerals, a scenario for which Tokyo may not be prepared.

Japan's industry ministry has earmarked about 4 trillion yen ($25 billion) over three years from fiscal 2021 to develop the country's semiconductor industry, and companies have begun ramping up investment in the sector.

“We oppose expanding regulations that could hinder the growth of the industry,” said a senior official at Japan’s industry ministry.

The US is seeking an agreement with its allies to add 11 Chinese semiconductor companies to its sanctions list, as well as expand the list of restricted export equipment.