A handful of semiconductor vendors met with the Biden Administration to discuss curbing further China export restrictions.
According to a report from Reuters, Intel, Qualcomm and Nvidia met with U.S. Commerce Secretary Gina Raimondo and other U.S. officials following Secretary of State Antony Blinken’s trip to China on supply chain issues and easing tensions between the countries.
Semiconductor companies want to protect their profits in China and see the export restrictions as hindering current and future purchases of chips. The Semiconductor Industry Association (SIA) said that China accounted for a third of the global chip sales and is the largest single market in the world.
The goal of the export restrictions is to reduce Chinese access to sophisticated chipmaking equipment and high-performance computing (HPC) chips. Further restrictions on semiconductors sold to China may be coming, according to the report.
As a result, the SIA issued a statement asking the Biden Administration to allow access to the Chinese market and avoid risking issues in the supply chain.
“Repeated steps, however, to impose overly broad, ambiguous, and at times unilateral restrictions risk diminishing the U.S. semiconductor industry’s competitiveness, disrupting supply chains, causing significant market uncertainty, and prompting continued escalatory retaliation by China,” the SIA statement said. “We call on both governments to ease tensions and seek solutions through dialogue, not further escalation.”
Additionally, the SIA said the administration should refrain from further restrictions until the impact of restrictions already implemented are narrowed and clearly defined and the impact can be determined.
Huawei came first
China export restrictions started during the Trump Administration when it put communications equipment maker Huawei on its Entity List under the Department of Commerce. The move virtually blacklisted U.S. companies from doing business with Huawei. Initially, the move was made to curb 5G equipment from being used for national security reasons. Later, it became a rallying cry to curb the advance of Chinese semiconductor manufacturing.
Earlier in 2023, the U.S. stopped approval of export licenses for companies looking to do business with Chinese electronic equipment vendor Huawei. The move was the latest in a series of moves to block the company from receiving advanced tools to produce advanced process technologies such as those being manufactured by TSMC, Samsung, Intel and GlobalFoundries.
Simultaneously, a semiconductor arms race started, and the U.S. pushed to expand its own homegrown manufacturing to make the supply chain more resilient. This included the signing of the CHIPS and Science Act last year designed to infuse $50 billion in incentives for chip firms to build new fabs in the U.S.
Since its inception, there have been a dozen new projects across the U.S. worth more than $200 billion in private and public investments, according to data from the SIA.
Other restrictions
Following adding Huawei to the Entity List, the U.S. government added SMIC to the Entity List in 2020 restricting sales of critical electronics for the manufacturing of semiconductors in the country.
In October of 2022, the USDOC expanded restrictions on high-performance computing such as CPUs and GPUs, which includes not only domestic companies in mainland China but also U.S.-based suppliers and U.S. citizens from helping support China’s chip development.
Due to these restrictions, DRAM makers that have fabs in China such as SK Hynix and Samsung have considered selling their fabs because they can’t get access to the latest technology. However, SK Hynix said it may expand legacy processes at its Wuxi, China, fab instead of transitioning to more advanced processes.
