A source says chip companies and senior US officials are meeting to discuss China policy

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 further restrictions under consideration.

A department spokesperson said Secretary of State Antony Blinken met with CEOs at the chip company to talk about industry and supply chains after his recent trip to China.

Government officials holding meetings with Intel (INTC.O), Qualcomm (QCOM.O) and Nvidia (NVDA.O) included Commerce Secretary Gina Raimondo, National Economic Council Director Lyle Brainard and National Security Council Director Jake Sullivan on Monday. said the source.

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 of the global total of $555.9 billion and the largest single market, according to the Semiconductor Industry Association (SIA).

β€œThe secretary viewed this meeting as an opportunity to do two things: one, to share his view on industry and supply chain issues, especially after his recent visit to China. and two, to hear directly from those companies about how they see supply chain issues,” State Department spokesman Matthew Miller told reporters. supply and how they see doing business in China.

Earlier on Monday, the US-based SIA called on the Biden administration to “refrain from further restrictions” on chip sales to China and urged the administration to allow “industry continued access to the Chinese market, the world’s largest commercial commodity semiconductor market”.

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Administration officials resented the pressure, saying they consulted closely with industry.

The Biden administration is considering updating a sweeping set of rules imposed in October to hamper China’s chip industry and a new executive order restricting some foreign investment.

A White House National Security Council spokesperson said in response to the CIA that “our actions are carefully designed to focus on technology that has national security implications, and are designed to ensure that U.S. and allied technologies are not used to undermine our national security.”

The source, who spoke on condition of anonymity, added that not every official is expected to meet with every company.

Reuters reported on Friday that the CEOs of Intel and Qualcomm were planning to visit Washington this week, according to two people familiar with the matter.

The Commerce Department and the White House declined to comment on any possible meetings.

China recently moved to restrict exports of raw materials like gallium and germanium that are used to make chips, something Blinken has discussed in his meetings.

The industry group said further tightening of rules by US officials risks “disrupting supply chains, causing significant market uncertainty, and prompting China’s sustained upward response.”

The group said it wanted the administration to “refrain from further restrictions until it has engaged extensively with industry and experts to assess the impact of existing and potential restrictions to determine whether they are narrow, clearly defined, consistently enforced, and fully coordinated with allies.”

Nvidia, Qualcomm and Intel all have significant sales in China. Qualcomm is the only company authorized by US regulators to sell mobile chips to Huawei Technology Co Ltd (HWT.UL).

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Nvidia is selling a modified AI chip for the Chinese market that is already gaining traction among major Chinese companies, and last week Intel CEO Pat Gelsinger traveled to China to announce the showcasing of its AI chips in China, called Gaudi2.

“The availability of Gaudi2 in China continues Intel’s nearly 40-year history of bringing innovative yet legally compliant products to this key growth market,” Intel said in a statement.

Raimondo oversees a $39 billion semiconductor manufacturing subsidy program that Congress approved last year. The law also created a 25% investment tax credit for building chip factories, valued at about $24 billion.

(Covering) Reporting by David Shepardson, Andrea Schalal and Simon Lewis in Washington and Stephen Nelis in San Francisco Editing by Susan Heavy, Matthew Lewis and Nick Zieminski

Our standards: Thomson Reuters Trust Principles.

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