U.S. semiconductor trade groups have mounted strong opposition to the President Joe Biden administration’s new chip export restrictions, warning of potential market share losses to global competitors in a private letter to Biden.
What Happened: The letter Tuesday, signed by six trade organizations including the Semiconductor Industry Association and SEMI, criticized the administration’s approach to implementing stricter controls on advanced computing chips and high-bandwidth memory technology, particularly regarding sales to China, Reuters reported.
"This rule threatens to derail innovation and economic growth worldwide," said Nvidia’s VP of government affairs, Ned Finkle, in a statement on Monday.
The pending regulations could particularly impact companies like Lam Research Corp. (NASDAQ:LRCX), potentially reversing earlier interpretations that had allowed hundreds of millions in additional revenue from Chinese memory chip makers, according to the report.
“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 said.
Why It Matters: Oracle Corp. Executive Vice President Ken Glueck warned the restrictions could reduce the international chip market for U.S. companies by up to 80%, significantly affecting the domestic cloud industry.
The rules arrive amid escalating U.S.-China tensions over semiconductor technology. In December, the U.S. blacklisted 140 Chinese entities and restricted memory chip exports, prompting Beijing to implement retaliatory export controls on critical minerals.
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