CEOs Of Chip Companies Call On US To Assess Impact Of China Restrictions And Exercise Caution

Top executives from major U.S. chip companies have advised Biden officials to carefully assess the consequences of export restrictions to China and suggested pausing before implementing any new measures.

What Happened: During meetings in Washington last week, Intel Corporation's INTC Pat Gelsinger, NVIDIA Corp.'s NVDA Jensen Huang and Qualcomm Inc.'s QCOM Cristiano Amon said that export controls risk harming U.S. leadership in the industry, Bloomberg reported.

The chip industry is grappling with escalating tensions between China and the U.S., leading companies to limit shipments to China due to national security concerns cited by Washington. 

According to the report, at least one executive opposed the existing rules prohibiting the export of artificial intelligence hardware to China, stating that the policy has not slowed down China's AI development as intended.

Executives of the chip companies mentioned that, while Chinese customers have been forced to buy more chips to do the work of banned products, it hasn't slowed the Chinese down considerably, Bloomberg noted. The executives argued that the availability and quality of software these customers are using more than compensate for any hardware restrictions.

Also Read: US Set To Restrict China's Access To Cloud Computing Services From Amazon, Microsoft

The Biden administration is actively exploring avenues to strengthen existing restrictions, including targeting chips produced by Nvidia specifically for the Chinese market, according to the outlet.

In addition to the U.S.-imposed restrictions, American chipmakers like Micron Technology Inc. MU have  encountered challenges from Beijing, impacting their business operations in China.

According to the report, U.S. National Security Adviser Jake Sullivan said that he agreed with the executives that the administration's approach needed to be a "small yard, high fence" — in other words, adequate but limited. He defended the administration's actions to date as just that, saying the measures were targeted and had virtually no impact on U.S.-China trade for most chips, Bloomberg reported. 

"The vast majority of sales of chips designed by the United States to China has continued unabated," he said at the Aspen Security Forum. "It continues to this day."

"We are going to continue to look at very targeted, very specific restrictions on technology with national security and military applications and make judgments rigorously, carefully, methodically — and, yes, in deep consultation with our private sector," he added.

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