By David Shepardson and Stephen Nellis
WASHINGTON (Reuters) -U.S. chip company executives are meeting with Biden administration officials on Monday to discuss China policy, a source told Reuters, as the most powerful semiconductor lobby group urged a halt to more curbs that are under consideration.
Secretary of State Antony Blinken met with chip company chief executives to talk about the industry and supply chains after his recent trip to China, a department spokesperson said.
Commerce Secretary Gina Raimondo, National Economic Council director Lael Brainard and National Security Council director Jake Sullivan on Monday are among government officials who are holding the meetings with Intel, Qualcomm and Nvidia, the source said.
The chip industry is keen to protect its profits in China as the Biden administration considers another round of restrictions on chip exports to China. Last year, China accounted for $180 billion in semiconductor purchases, more than a third the worldwide total of $555.9 billion and the largest single market, according to Semiconductor Industry Association (SIA).
“The secretary looked at that meeting as an opportunity to do two things: Number one, to share his perspective on the industry and on supply chain issues, especially after his recent visit to China. And number two, to hear directly from those companies about how they see supply chain issues, about how they see doing business in China,” State Department spokesperson Matthew Miller told reporters.
Earlier on Monday, the U.S.-based SIA called on the Biden administration to “refrain from further restrictions” on chip sales to China and urged the administration to allow “the industry to have continued access to the China market, the world’s largest commercial market for commodity semiconductors.”
Administration officials chafed at the pressure, saying they had consulted closely with industry.
The Biden administration is considering updating a sweeping set of rules imposed in October to hobble China’s chip industry and a new executive order restricting some outbound investment.
A White House National Security Council spokesperson said in response to SIA that “our actions have been carefully tailored to focus on technology with national security implications, and designed to ensure that U.S. and allied technologies are not used to undermine our national security.”
Not every official is expected to meet with every company, the source who spoke on condition of anonymity added.
On Friday, Reuters reported that the CEOs of Intel and Qualcomm were planning to visit Washington this week, according to two sources familiar with the matter.
The Commerce Department and White House declined to comment on any potential meetings.
China recently moved to restrict exports of raw materials such as gallium and germanium that are used in making chips, something Blinken discussed in his meetings.
Further rule-tightening by U.S. officials risks “disrupting supply chains, causing significant market uncertainty, and prompting continued escalatory retaliation by China,” the industry group said.
The group said it wants the administration “to refrain from further restrictions until it engages more extensively with industry and experts to assess the impact of current and potential restrictions to determine whether they are narrow and clearly defined, consistently applied, and fully coordinated with allies.”
Nvidia, Qualcomm and Intel each have crucial sales riding on China. Qualcomm is the only company with a license from U.S. regulators to sell mobile phone chips to Huawei Technology Co Ltd .
Nvidia is selling an artificial intelligence chip tweaked for the Chinese market that is already gaining traction among major Chinese firms, and Intel Chief Executive Pat Gelsinger last week traveled to China to announce its own AI chip offering in China, called Gaudi2.
“The availability of Gaudi2 in China continues Intel’s nearly 40-year history of delivering innovative yet legally-compliant products to this key growth market,” Intel said in a statement.
Raimondo is overseeing a $39 billion semiconductor manufacturing subsidy program approved by Congress last year. The law also created a 25% investment tax credit for building chip plants, estimated to be worth $24 billion.
(Reporting by David Shepardson, Andrea Shalal and Simon Lewis in Washington and Stephen Nellis in San FranciscoEditing by Susan Heavey, Matthew Lewis and Nick Zieminski)
