Leaders of the largest US chipmakers told US government officials last week that US President Joe Biden’s administration should study the impact of restrictions on exports to China and pause 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 (黃仁勳) and Qualcomm Inc CEO Cristiano Amon warned that export controls risk harming US leadership of the industry.
The Biden officials listened to the presentations, but did not make any commitments, said the people, who asked not to be identified because the talks were private.
Photo: Reuters
The chip industry is trying to navigate increasing tensions between China and the US. Companies are being forced to curb shipments to their largest market by Washington, which has cited national security concerns about the Asian nation acquiring certain capabilities.
One of the executives against current rules restricting the export of artificial intelligence (AI) hardware to China, saying the policy has not achieved the intended outcome of slowing China’s AI development.
The Biden team has been exploring ways to further tighten existing curbs — for example, by targeting chips made by Nvidia specifically for the Chinese market, according to people familiar with the matter.
US National Security Adviser Jake Sullivan said on Friday he agreed with the executives that the approach needs to be a “small yard, high fence” — effective but limited. He defended the administration’s actions to date as just that, saying the measures were targeted and had virtually no impact on US-China trade for most chips.
“The vast majority of sales of chips designed by the United States to China has continued unabated,” he said at the Aspen Security Forum. “It continues to this day.”
He hinted that more curbs could follow, but that they would only be implemented after robust discussion with the affected companies.
“We are going to continue to look at very targeted, 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 the discussion on Monday, Gelsinger told Sullivan, US Secretary of State Antony Blinken and other officials that further restricting what his company does in China puts at risk a key Biden policy of bringing back chip production to the US, the people said.
Without orders from Chinese customers, there will be much less need to go ahead with projects such as Intel’s planned factory complex in Ohio, the executive said, according to the people.
Huang said limiting sales of some Nvidia chips in China had just made alternatives more popular.
Overall, the executives argued that while Chinese customers have been forced to buy more chips to do the work of banned products, that has not significantly slowed them down. The availability and quality of software they’re 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 on Wednesday.
“We did communicate a very important message on China,” he said. “Right now, China represents 25 percent to 30 percent of semiconductor exports. If I have 20 or 30 percent less market, I need to build less factories.”
It is in the interest of the US to allow its chip companies access to the Chinese market in general because revenue from that country helps fuel research and development, he said. And that is needed to keep the nation’s lead in new technology such as quantum computing.
Qualcomm gets more than 60 percent of its revenue from the China region, where it supplies components to smartphone makers such as Xiaomi Corp (小米).
Gelsinger, who visited Beijing this month to show off his company’s latest AI chips, counts the nation as Intel’s biggest sales region, with China providing about a quarter of its revenue. For Nvidia, China provides about a fifth of sales.
Chip equipment makers such as Applied Materials Inc have taken the biggest revenue hits, but the restrictions, which companies fear will be extended to other chips, are also affecting some device makers.
France cannot afford to ignore the third credit-rating reduction in less than a year, French Minister of Finance Roland Lescure said. “Three agencies have downgraded us and we can’t ignore this cloud,” he told Franceinfo on Saturday, speaking just hours after S&P lowered his country’s credit rating to “A+” from “AA-” in an unscheduled move. “Fundamentally, it’s an additional cloud to a weather forecast that was already pretty gray. It’s a call for lucidity and responsibility,” he said, adding that this is “a call to be serious.” The credit assessor’s move means France has lost its double-A rating at two of the
AI BOOST: Although Taiwan’s reliance on Chinese rare earth elements is limited, it could face indirect impacts from supply issues and price volatility, an economist said DBS Bank Ltd (星展銀行) has sharply raised its forecast for Taiwan’s economic growth this year to 5.6 percent, citing stronger-than-expected exports and investment linked to artificial intelligence (AI), as it said that the current momentum could peak soon. The acceleration of the global AI race has fueled a surge in Taiwan’s AI-related capital spending and exports of information and communications technology (ICT) products, which have been key drivers of growth this year. “We have revised our GDP forecast for Taiwan upward to 5.6 percent from 4 percent, an upgrade that mainly reflects stronger-than-expected AI-related exports and investment in the third
Mercuries Life Insurance Co (三商美邦人壽) shares surged to a seven-month high this week after local media reported that E.Sun Financial Holding Co (玉山金控) had outbid CTBC Financial Holding Co (中信金控) in the financially strained insurer’s ongoing sale process. Shares of the mid-sized life insurer climbed 5.8 percent this week to NT$6.72, extending a nearly 18 percent rally over the past month, as investors bet on the likelihood of an impending takeover. The final round of bidding closed on Thursday, marking a critical step in the 32-year-old insurer’s search for a buyer after years of struggling to meet capital adequacy requirements. Local media reports
RARE EARTHS: The call between the US Treasury Secretary and his Chinese counterpart came as Washington sought to rally G7 partners in response to China’s export controls China and the US on Saturday agreed to conduct another round of trade negotiations in the coming week, as the world’s two biggest economies seek to avoid another damaging tit-for-tat tariff battle. Beijing last week announced sweeping controls on the critical rare earths industry, prompting US President Donald Trump to threaten 100 percent tariffs on imports from China in retaliation. Trump had also threatened to cancel his expected meeting with Chinese President Xi Jinping (習近平) in South Korea later this month on the sidelines of the APEC summit. In the latest indication of efforts to resolve their dispute, Chinese state media reported that
RSS