Trade Groups Push Back on Biden's New Chip Export Rules

A coalition of semiconductor and manufacturing trade groups has expressed concerns to U.S. President Joe Biden over recently announced export controls on advanced computing chips. The Semiconductor Industry Association (SIA) and SEMI, representing chipmakers and manufacturing tool firms, argued in a private letter dated January 13 that the new regulations were rushed without adequate industry consultation.

The Biden administration introduced a three-tier licensing system this week, requiring most countries to obtain approval to use U.S.-made chips for AI data centers. The rules also propose stricter controls on high-bandwidth memory (HBM), a key component for advanced AI chip production. Currently produced by U.S. and Korean firms, HBM exports to China would face tighter restrictions.

Trade groups warn the changes could harm U.S. companies and allow global competitors to gain market share. They criticized the lack of public comment on regulations with significant economic and international consequences.

Sources indicate the rules might also reverse prior interpretations, impacting firms like Lam Research, which supplies equipment to memory chip manufacturers in China. This could reduce revenue that had unexpectedly surged due to earlier leniencies.

The SIA and SEMI did not respond to requests for comment. Similarly, Nvidia (NASDAQ:NVDA) and Lam Research (NASDAQ:LRCX) remain silent on the matter.

The new measures underscore escalating U.S.-China tech tensions as the U.S. seeks to maintain its edge in AI and semiconductor advancements. However, the trade groups warn of long-term repercussions on the global chip industry.