Chip Industry Groups Criticize Biden Administration’s Export Controls in Private Letter
Six major trade groups representing the semiconductor and manufacturing industries have privately expressed their dissatisfaction with the Biden administration over impending export control rules. In a letter sent to President Joe Biden on January 13, these groups criticized the rushed nature of the rule-making process, claiming there was little to no consultation with the industry despite the regulations' significant global and economic implications.Concerns Over New Regulations
On Monday, the administration unveiled new rules dictating where U.S.-produced computing chips, such as those from Nvidia, can be deployed globally. The rules establish a three-tier licensing system for nations intending to use U.S. chips in artificial intelligence (AI) data centers.In their letter, trade groups, including the Semiconductor Industry Association (SIA) and SEMI (representing chip manufacturers and toolmakers), voiced their opposition to these rules, as well as additional restrictions anticipated this week.
"We understand that this additional rule will even more strictly control high-bandwidth memory, without consideration of how such changes may impact U.S. companies or cede market share to global competitors," the letter stated. The groups criticized the administration for developing these policies without meaningful industry input or public comment, despite their far-reaching implications.
Potential Impact on High-Bandwidth Memory
The anticipated restrictions could significantly impact the production and sale of high-bandwidth memory (HBM), a crucial component in manufacturing advanced AI chips. Currently, HBM is predominantly produced by U.S. and South Korean companies. The new rules would likely limit its export to China, further tightening restrictions on advanced technology sales to the region.A source familiar with the situation also indicated that the updated regulations may reinterpret earlier rules. This change could affect companies like Lam Research, which supplies equipment to memory chipmakers in China. Under the prior interpretation, companies like Lam had been able to generate hundreds of millions of dollars in additional revenue.
Industry Pushback
The lack of consultation has frustrated industry leaders, who argue that the new regulations could inadvertently weaken U.S. companies’ global competitiveness and hand an advantage to international rivals. Both SIA and SEMI have declined to comment publicly on the matter.Meanwhile, Lam Research has not yet responded to inquiries about how the potential changes might impact its business.
The situation highlights the growing tension between the U.S. government’s efforts to curb China's access to advanced technology and the semiconductor industry’s desire for stability and predictability in global markets.