U.S. semiconductor industry chief executives met Monday with top economic and national security officials from the U.S. government. The theme of the discussion was that sanctions against China would become tougher, meaning that chip makers’ sales to the country would face friction.
According to a report from Reuters, bloomberg and forbes , CEOs of Intel, Nvidia, Qualcomm and others met directly with Biden administration officials. Commerce Secretary Gina Raimond, National Economic Council Director Lael Brainard, and National Security Council Director Jake Sullivan were part of the delegation. Apparently, representatives of tech company CEOs are a powerful lobbying force against trade restrictions and trade barriers. When it comes to trade restrictions, new tougher measures are due to be applied by the US in the coming weeks, and things could get even worse.
There are no press releases or statements about the talks to refer to, but we can make some educated guesses about the direction of the talks. Back in October, the U.S. Department of Commerce issued updated rules regarding the sale of certain tools and chips to China, and they are about to go into effect. So government economic and security officials will no doubt argue their case with CEOs. On the other hand, Gelsinger, Huang, Ammon and others will want to export “room to wriggle” so they don’t have to intentionally scale back their operations in China.
Potential business impact
Of the three tech giants mentioned above, Qualcomm appears to be most likely to be hit hardest by tightening U.S. regulation. According to Bloomberg, 60% of Qualcomm’s operating revenue comes from the region. Qualcomm’s chips, on the other hand, appear to be primarily sold to non-strategic areas. In other words, it is a powerful AI-accelerating chip that is suspected of helping China’s military development and has been the focus of recent trade restriction moves. For Nvidia, around 20% of its revenue is currently generated from sales in this region.
Also on Monday, the Semiconductor Industry Association (SIA) called on the U.S. and Chinese governments to end expanding trade and technology export controls and instead facilitate ties through dialogue. The company had previously voiced concerns about these measures in January.
Where was AMD’s CEO?
Readers may have noticed that AMD CEO Dr. Lisa Su was conspicuously absent from the high-level meeting. However, she is now far from America and business trip to Taiwan.