CEOs from the US semiconductor industry have met with senior US government economics and national security figures on Monday. The topic under discussion was the growing strictness of sanctions placed on China, meaning chipmaker sales to the nation would encounter friction.
According to reports from Reuters, Bloomberg and Forbes, the CEOs from Intel, Nvidia, Qualcomm and others, met in person with officials from the Biden administration. Commerce Secretary Gina Raimondo, National Economic Council director Lael Brainard and National Security Council director Jake Sullivan formed part of the delegation. Apparently, representatives of the tech CEOs have been strongly lobbying against trade curbs and barriers. In respect of trade restrictions things could get worse as new, stronger measures are set to be applied from the US in the coming weeks.
We don’t have any press released or statements about the meeting to refer to, but we can make some educated guesses about the direction of the talks. Back in October, the US Commerce Department issued updated rules about the sales of certain tools and chips to China, and those are about to be enacted. The economics and security officials from the government would therefore surely be putting their case to the CEOs. Meanwhile, the likes of Gelsinger, Huang, and Amon would be looking for exporting “wriggle room“, so they don’t have to intentionally decimate their China business operations.
Potential Business Impacts
Of the three tech titans mentioned above, it looks like Qualcomm could potentially be the most adversely affected by strengthened restrictions implemented by the US. Bloomberg says that 60% of Qualcomm’s business revenue comes from the region. On the other hand, Qualcomm chips seem to be largely sold into less-strategic areas. In other words it is the powerful AI accelerating chips, which are suspected as being useful for China’s military developments, which are more the focus of the latest bout of trade restrictions. For Nvidia, about 20% of revenue is currently generated by sales in the region.
Also on Monday, the Semiconductor Industry Association (SIA) called on the US and Chinese governments to cease the escalation of trade and technology export restrictions and to instead smooth relations through dialog. It previously voiced concerns about these measures in January.
Where was the AMD CEO?
Readers may have noticed that AMD’s CEO, Dr Lisa Su, was conspicuous by her absence from the high level meeting. However, she is currently a long way from the US, in the midst of a business trip to Taiwan.