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.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
STILL UNCLEAR: Several aspects of the policy still need to be clarified, such as whether the exemptions would expand to related products, PwC Taiwan warned The TAIEX surged yesterday, led by gains in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after US President Donald Trump announced a sweeping 100 percent tariff on imported semiconductors — while exempting companies operating or building plants in the US, which includes TSMC. The benchmark index jumped 556.41 points, or 2.37 percent, to close at 24,003.77, breaching the 24,000-point level and hitting its highest close this year, Taiwan Stock Exchange (TWSE) data showed. TSMC rose NT$55, or 4.89 percent, to close at a record NT$1,180, as the company is already investing heavily in a multibillion-dollar plant in Arizona that led investors to assume