China has threatened Japan with severe economic retaliation if Tokyo further restricts the sale and maintenance of chip-making equipment to Chinese companies, complicating U.S.-led efforts to cut off the world’s second-largest economy from advanced technology.
Chinese officials have repeatedly made that point in recent meetings with their Japanese counterparts, people familiar with the matter said. Toyota Motor privately told officials in Tokyo that a particular fear in Japan is that Beijing could respond to new semiconductor controls by restricting Japan’s access to critical minerals essential to car production, the people said, declining to be named because of their private nature.
Toyota is one of Japan’s most important companies and has been deeply involved in the country’s chip policy, evidenced in part by its investment in a new chip campus being built by Taiwan Semiconductor Manufacturing Company in Kumamoto, one of the people said. That makes its concerns a key consideration for Japanese officials, alongside those of Tokyo Electron, the semiconductor equipment maker that would be most affected by Japan’s new export controls.
