Senior executives at America’s largest semiconductor companies are embarking on one final push to prevent Washington from imposing new restrictions on their sales to China, as they head to DC to talk with administration officials and lawmakers.
CEOs from Intel Corp., Qualcomm Inc., and Nvidia Corp. are hoping to prevent the Biden administration from extending restrictions on selling specific chips and equipment to manufacture semiconductors to China, which the White House is poised to roll out in the coming weeks, according to people familiar with the matter.
While the CEOs do not expect they can stop all of the measures from going into effect, they are hoping that with an approaching election, they will be able to argue that escalating the war on technology with China would damage diplomatic efforts by the White House, which is seeking to establish a more productive relationship with China.
The semiconductor manufacturers are at the center of a growing conflict between Beijing and Washington over advanced technologies. The United States, which is responsible for the production of such technologies, is trying to restrict Chinese access to them on the grounds it is necessary for national security, and will prevent China’s military from developing weapons technologies which could threaten the safety of the nation.
The companies, however argue that China is their largest market, and being cut off from it will damage their ability to make profits which will help them advance their own technologies, and ultimately that will damage US dominance in the tech sector.
Representatives of the three companies declined to comment.
Analysts have noted that more than 60% of Qualcomm’s revenue comes from China through supplying components to smartphone manufacturers like Xiaomi Corp. Meanwhile Intel considers China its single biggest sales region, providing roughly a quarter of the company’s sales. Nvidia acquires roughly a fifth of its revenue from China.
The companies were hit hard when the Commerce Department announced in October that it was issuing rules which would bar semiconductor equipment manufacturers from supplying specific tools to China, and bar the export of specific chips used in artificial intelligence applications.
The decision hit chip equipment makers like Applied Materials Inc hard, forcing them to downsize projections by billions of dollars. However the restrictions, which the industry fears will spread to other classes of computer chips, are also affecting device-makers. Nvidia can no longer ship its industry-leading artificial intelligence accelerators to China without special approvals, which has severely curbed sales.
In a statement, Representative Mike Gallagher, a Wisconsin Republican and chairman of a House committee on competition with China, said, “I’m alarmed that some American CEOs continue to advocate for weaker export controls on sensitive technology. The Biden administration needs to tighten our export controls on advanced chips.”
As the US has been restricting China’s access to technology we produce at home, it has also been curbing Beijing’s access to technologies produced overseas. ASML Holding NV, one of the biggest suppliers of chipmaking equipment has seen its home government of the Netherlands place tighter restrictions on its exports of chipmaking equipment. In addition the US has pressured the company with the threat of restricting its access to critical parts it needs for its machines from US companies.
