Chip CEOs urge US to reflect on effects of China curbs - Taipei Times

Chip CEOs urge US to reflect on effects of China curbs – Taipei Times

The leaders of the largest US chipmakers told US government officials last week that US President Joe Biden’s administration should study the impact of export restrictions on China and stop before implementing new ones, according to people familiar with their discussions.

During meetings in Washington on Monday, Intel Corp CEO Pat Gelsinger, Nvidia Corp CEO Jensen Huang () and Qualcomm Inc CEO Cristiano Amon warned that export controls risk hurting US industry leadership.

Biden officials heard the presentations but made no commitments, said the people, who asked not to be identified because the talks were private.

Photo: Reuters

The chip industry is trying to overcome the growing tensions between China and the United States. Firms are being forced to curb shipments to their biggest market from Washington, which has cited national security concerns over the Asian nation’s acquisition of certain capabilities.

One of the executives against the current rules limiting the export of artificial intelligence (AI) hardware in China, saying the policy has not achieved the intended result of slowing down the development of AI in China.

Biden’s team has been exploring ways to further tighten existing limitations, for example by targeting chips made by Nvidia specifically for the Chinese market, according to people familiar with the matter.

US National Security Advisor Jake Sullivan said Friday he agreed with executives that the approach must be a small courtyard, an effective but limited high fence. He defended the administration’s actions to date just like this one, saying the measures were targeted and had virtually no impact on US-China trade for most chips.

The vast majority of sales of US-designed chips to China have continued unabated, he said at the Aspen Security Forum. Continue to this day.

He hinted that other limits could follow, but would only be implemented after a thorough discussion with affected companies.

We will continue to look at very targeted and very specific restrictions on technology with national security and military applications and make judgments rigorously, carefully, methodically and, yes, in deep consultation with our private sector, he said.

During Monday’s discussion, Gelsinger told Sullivan, US Secretary of State Antony Blinken and other officials that further limiting what his company does in China jeopardizes a key Biden policy of bringing chip manufacturing back to the US, the people said.

Without orders from Chinese customers, there will be much less need to move forward with projects like Intel’s planned industrial complex in Ohio, the executive said, according to People.

Huang said restricting sales of some Nvidia chips in China has just made the alternatives more popular.

Overall, executives argued that while Chinese customers have been forced to buy more chips to do the job of banned products, it hasn’t slowed them down significantly. The availability and quality of the software they are using more than compensates for any hardware restrictions, they said.

Gelsinger, who also spoke at the Aspen Security Forum, mentioned the meetings in Washington during his appearance Wednesday.

We communicated a very important message about China, he said. Right now, China accounts for 25 to 30 percent of semiconductor exports. If I have 20 or 30 percent less market, I have to build fewer factories.

It is in the US interest to allow its chip companies access to the broader Chinese market because revenue from that country helps fuel research and development, he said. And this is necessary to keep nations at the forefront of new technologies such as quantum computing.

Qualcomm gets more than 60 percent of its revenue from the China region, where it supplies components to smartphone makers like Xiaomi Corp ().

Gelsinger, who visited Beijing this month to show off his company’s latest AI chips, counts the nation as Intel’s largest sales region, with China providing about a quarter of its revenue. For Nvidia, China provides about a fifth of sales.

Chip equipment makers like Applied Materials Inc have taken the biggest revenue hits, but the restrictions, which companies fear are being extended to other chips, are also affecting some device makers.

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