Why Intel, Nvidia and Qualcomm are asking Biden to be less harsh on China
Some of the most important American microchip companies, such as Intel, Qualcomm and Nvidia, are asking Biden for a break from export restrictions in China, a very important market. But the White House does not seem to want to please them. All the details
Executives from some of America's top microchip companies met in recent days with officials from Joe Biden's administration to discuss White House policy toward China. Specifically, the semiconductor industry would like a break from the (rather stringent) restrictions on the export of advanced chip technologies to China, a vast and therefore important sales market.
Meeting to discuss were, on the one hand, the CEOs of Intel , Qualcomm and NVIDIA ; on the other hand, the secretary of Commerce Gina Raimondo, the adviser for national security Jake Sullivan and the director of the national economic council Lael Brainard.
THE WEIGHT OF CHINA IN THE MICROCHIP MARKET
The Biden administration is planning to introduce new and more extensive restrictions on the export of advanced chip-making machinery to China, with the aim of curbing the country's industrial and military development. The American (and international) semiconductor industry is not happy: last year, according to data from the Semiconductor Industry Association, China was the largest market for semiconductors, with purchases worth 180 billion dollars on a total of 555 billion. Intel, NVIDIA and Qualcomm essentially don't want to be denied access to such a lucrative market.
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At a recent press conference, State Department spokesman Matthew Miller, referring to Antony Blinken 's trip to China in late June, said the secretary tried "to share his point of view on the industry [of microchip, ed ] and on issues relating to the supply chain” and “to hear directly from these companies how they see issues relating to the supply chain and how they see business in China”.
THE CHIPS ACT
In addition to export controls, discussions between industrialists and Biden administration officials also concerned the CHIPS Act, the stimulus plan for semiconductor research and production in the United States. The section of the CHIPS Act dedicated to manufacturing, containing 39 billion in subsidies, is overseen by secretary Raimondo.
WON'T BIDEN GIVE IN TO INDUSTRIALS?
On Monday, the Semiconductor Industry Association asked the Biden administration to "refrain from further restrictions" on microchip sales to China and to allow "industry to continue to have access to the Chinese market, the world's largest commercial market for basic semiconductors". According to Reuters , however, the US government does not seem to have the intention of pleasing the industrialists and therefore will proceed with new restrictions on the export of the most advanced chips, such as those for artificial intelligence, motivating them with national security (artificial intelligence can also be used in the military, in fact).
A spokesman for the National Security Council specified to Reuters that "our actions have been carefully designed to be focused on technologies that have implications for national security, and to ensure that the technologies of the United States and its allies are not used to undermine our national security,” said a White House National Security Council spokesman.
THE INTERESTS OF NVIDIA, QUALCOMM AND INTEL IN CHINA
Qualcomm, NVIDIA and Intel all have big interests in China. Qualcomm, for example, is the only company to have obtained a license from the American authorities to sell chips for smartphones to Huawei. Intel CEO Pat Gelsinger went to China last week to announce semiconductors for artificial intelligence, while NVIDIA already sells them.
WHAT ABOUT APPLE?
Very interested in the Chinese market, but not directly linked to the production of semiconductors, is Apple. Last March, the CEO Tim Cook attended the China Development Forum (the annual conference organized by the Chinese government to promote contacts between the domestic and foreign business communities) and during the event he spoke of a "symbiotic" relationship between Apple and China. He then announced that the company would increase spending on an education program in China's countryside to 100 million yuan ($15 million) and – according to local media reports – spend words of praise for the People's Republic's technological progress: “ innovation is developing very fast in China, and I think it will accelerate further,” he said.
Tim Cook was the architect of Apple's expansion in China: it began a decade ago, and now the country accounts for about 20 percent of the company's sales. From 2015 onwards, thanks above all to the iPhone, Apple has recorded revenues of over 40 billion a year in China; in the last fiscal year it almost reached $75 billion in sales in the country.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/intel-nvidia-qualcomm-restrizioni-chip-nvidia/ on Thu, 20 Jul 2023 09:06:34 +0000.