American Chipmakers Oppose Stricter Export Regulations for China

American Chipmakers Oppose Stricter Export Regulations for China. Several industry associations of chip makers urge the U.S. government not to tighten the rules for exports to China.

 

Last week, Reuters announced that the Trump administration is planning to tighten exports of optical technology, radar equipment, and semiconductors (including computer chips).

For example, the U.S. wants to prevent American technology intended for Chinese companies and consumers from being used for military purposes. Goods that are currently exported to China without a license should now also have licenses.

The plan faces stiff opposition from the U.S. technology sector. Nine industry associations, including the Semiconductor Industry Association and the National Foreign Trade Council, opposed a letter addressed to U.S. Secretary of Commerce Wilbur Ross.

“This could have a significant impact on the semiconductor industry, its global supplies and the broader technology sector,” said the letter Reuters viewed.

The letter advocates allowing public comments on the stricter rules so that the government can avoid unwanted consequences. The lobby organizations point out, for example, that chips are the driving force in advanced medical equipment, but that they also help to make telework possible.

Last week, the chairman of SEMI, one of the interest groups that signed the letter, already pointed out that strict rules would harm exports of American chip makers. This commodity brings in $ 20 billion annually. But he also pointed out that a tighter attitude to China is creating uncertainty in global supply chains, which are currently critical in the fight against COVID-19.

The export measures are part of a broader trade war that the U.S. is waging with China. For example, the U.S. has been trying for some time to discredit Huawei in various countries, but the company is also no longer given access to American technology.

That now seems to be expanding, almost for chips, to almost all of China. A move that will hit Chinese manufacturers, but is also likely to cause serious economic damage to American chipmakers, who will no longer be able to serve nearly 20 percent of the world’s population if they are banned.