China Chip Industry Group Urges U.S. to Halt More Restrictions on Trade

25 Jul 2023

A leading Chinese semiconductor industry group has urged the U.S. to refrain from imposing more restrictions on chip sales to China, warning of negative consequences for the global supply chain for microchips, which are used in everything from cars to laptops, and the consumers who use them.

The semiconductor industry has benefited from regional specialization and international collaboration between major countries, becoming a model of globalization, the China Semiconductor Industry Association (CISA) said in a statement Wednesday.

“Any damage to the current global supply chain, which developed over the past decades alongside the process of globalization, could create inevitable and irreparable harm to the global economy,” said the CSIA, which represents more than 700 Chinese chipmakers, according to its website.

The U.S. government is considering new rules to limit the exports of artificial intelligence (AI) chips made by Nvidia Corp. and others to China, the Wall Street Journal reported in late June, citing unnamed sources. The move will be part of final rules codifying and expanding the export control measures announced in October, according to the report.

The new restrictions imposed last year on China’s access to American semiconductor technology aimed to contain Beijing’s ambitions to advance its chip industry and bolster the U.S.’ own domestic chip production.

The CSIA’s comments echoed those of its U.S. counterpart, which on Monday called on the Biden administration to refrain from expanding restrictions until “it engages more extensively with industry and experts to assess the impact of current and potential restrictions.”

“Repeated steps … to impose overly broad, ambiguous, and at times unilateral restrictions risk diminishing the U.S. semiconductor industry’s competitiveness, disrupting supply chains, causing significant market uncertainty, and prompting continued escalatory retaliation by China,” the Semiconductor Industry Association, a lobby group representing the largest U.S. chipmakers, said in a statement.

Leaders of major American chip companies have also been trying to persuade the U.S. government to halt the expansion of trade restrictions.

U.S. Secretary of State Antony Blinken met with chief executives of companies including Intel Corp., Qualcomm Inc. and Nvidia about the industry and supply chains following his recent trip to China to hear their views on these issues, a U.S. State Department spokesperson said at a press briefing Monday.

The U.S. has taken increasingly aggressive measures to limit China from pursuing technological dominance, including calling upon allies in Europe and Asia to do the same.

The Dutch government announced measures earlier in July that will prevent ASML Holding NV — a company with a near-monopoly on the machines needed to make the most advanced semiconductors — from selling some of its machines to China.

In retaliation, the Chinese government earlier this month imposed restrictions on exports of two metals that are crucial to parts of the semiconductor, telecommunications and electric-vehicle industries.

Earlier this year, it also banned U.S. chipmaker Micron Technology Inc.’s products from some of its critical sectors after saying it found “relatively serious” risks in a cybersecurity review.