Executives from leading US chip companies met with top Biden administration officials on Monday to discuss China policy, as the most powerful semiconductor lobby group warned against implementing fresh curbs.
Secretary of State Antony Blinken talked with chip company chief executives about the industry and supply chains after his recent trip to China, a department spokesperson told reporters.
Commerce Secretary Gina Raimondo, National Economic Council director Lael Brainard and National Security Council director Jake Sullivan were among other government officials meeting with Intel, Qualcomm and Nvidia, a source familiar with the meetings said.
Also on AF: Yellen Says China Investment Curbs Will Be ‘Narrow In Scope’
The chip industry is keen to protect its profits in China as the Biden administration considers another round of restrictions on chip exports to the world’s second-largest economy.
Last year, China accounted for $180 billion in semiconductor purchases, more than a third of the worldwide total of $555.9 billion and the largest single market, according to Semiconductor Industry Association (SIA).
Prior to the meeting, US-based SIA called on the Biden administration to “refrain from further restrictions” on chip sales to China.
Such curbs could backfire, the group said, by “diminishing the US semiconductor industry’s competitiveness, disrupting supply chains, causing significant market uncertainty, and prompting continued escalatory retaliation by China,” according to a report by the Wall Street Journal.
The SIA said fresh curbs on China could also undermine US efforts to develop its semiconductor industry through the CHIPS act, the report added.
The lobby urged the US to allow “the industry to have continued access to the China market, the world’s largest commercial market for commodity semiconductors.”
Commerce’s Raimondo is overseeing the $39 billion CHIPS Act semiconductor manufacturing subsidy programme approved by Congress last year. The law also created a 25% investment tax credit for building chip plants, estimated to be worth $24 billion.
Blinken shares government ‘perspective’
Blinken sought “to share his perspective on the industry and on supply chain issues, especially after his recent visit to China” and “to hear directly from those companies about how they see supply chain issues, about how they see doing business in China,” State Department spokesperson Matthew Miller said at a press briefing.
Discussions with government officials also included speeding up disbursement of government money put aside for semiconductor firms in the CHIPS Act and making sure US policy does not shut the chip firms out of the lucrative Chinese market, a second source familiar with the matter said.
The US government is currently focused on China’s access to the most sophisticated artificial intelligence chips, a source said, saying Washington appears close to tightening the rules around how much computing speed such chips could have but have not yet picked a specific threshold.
“Our actions have been carefully tailored to focus on technology with national security implications, and designed to ensure that US and allied technologies are not used to undermine our national security,” a White House National Security Council spokesperson said.
Not every official was expected to meet with every company, the initial source said.
The meetings come after China recently moved to restrict exports of raw materials such as gallium and germanium that are used in making chips, something the department spokesman said Blinken discussed in CEO conversations.
Nvidia, Qualcomm and Intel have crucial sales riding on China. Qualcomm is the only company with a licence from US regulators to sell mobile phone chips to Huawei Technology.
Nvidia is selling an AI chip tweaked for the Chinese market that is already gaining traction among major Chinese firms, and Intel Chief Executive Pat Gelsinger last week traveled to China to announce its own AI chip offering in China.
- Reuters, with additional editing by Vishakha Saxena
Also read:
US-Made ‘Chiplet’ Tech Emerges as Core China Chip Strategy
Curbs on Chipmaking Metals ‘Just The Beginning’, China Warns
US to Cut China Access to Amazon, Microsoft Cloud Computing: WSJ
China Curbs Mean Permanent Loss of Opportunities for US, Nvidia Says
US to Target Investment in China Chips, AI, Quantum Computing
US Risks ‘Enormous Damage’ With China Chip War: Nvidia CEO
