Title: Chip Industry Leaders Urge US to Consider Impact of Restrictions on China
The CEOs of major US chipmakers recently held discussions with government officials, urging the Biden administration to carefully review the repercussions of imposing export controls on China. Intel Corp CEO Pat Gelsinger, Nvidia Corp CEO Jensen Huang, and Qualcomm Inc CEO Cristiano Amon emphasized the potential harm to the US’s leadership in the industry if restrictions are implemented. While the officials listened to their presentations, no commitments were made during the private talks.
The chip industry is currently grappling with escalating tensions between China and the US. Washington has compelled companies to limit shipments to China, citing concerns about national security and China’s acquisition of certain capabilities. However, one executive argued that current policies restricting the export of artificial intelligence (AI) hardware to China have failed to slow down the country’s AI development as intended.
It is reported that the Biden administration is exploring options to further tighten existing restrictions, including targeting Nvidia chips made specifically for the Chinese market. US National Security Adviser Jake Sullivan recently echoed the sentiments expressed by the chip industry executives, stating that restrictions should be limited but effective. Sullivan defended the administration’s current measures, emphasizing their minimal impact on US-China trade in most chips.
Despite this, Sullivan indicated the possibility of additional restrictions in the future. However, he emphasized that any new curbs would involve extensive consultations with affected companies. During the discussions, Gelsinger shared concerns about jeopardizing a key Biden policy of reshoring chip production to the US if further limitations were imposed on their activities in China. Huang highlighted that restrictions on Nvidia chips in China had only fueled the popularity of alternative options.
The executives argued that while Chinese customers have been forced to purchase more chips to replace banned products, this has not significantly hindered their operations. They stated that the availability and quality of software compensate for any hardware restrictions. Gelsinger stressed the importance of the US allowing chip companies to access the Chinese market, as revenue from China fuels research and development needed to maintain the nation’s leadership in technology, such as quantum computing.
The China region accounts for over 60% of Qualcomm’s revenue, with the company supplying components to smartphone manufacturers like Xiaomi Corp. For Intel, China represents its largest sales region, contributing about a quarter of its revenue, while China provides around a fifth of sales for Nvidia.
The chip industry’s concerns over restrictions extend beyond chip equipment makers like Applied Materials Inc, as device manufacturers also anticipate potential limitations on other chips. As tensions between the US and China continue to escalate, chip industry leaders believe that a comprehensive understanding of the impact of restrictions is necessary to avoid unintended consequences and ensure the US remains at the forefront of the global chip industry.
