Chip companies, top US officials meet on China policy, source says

By David Shepardson and Stephen Nellis

WASHINGTON (Reuters) – Senior U.S. chip company executives are holding meetings with Biden administration officials on Monday to discuss China policy as the U.S. considers new restrictions, a source told Reuters.

Commerce Secretary Gina Raimondo, National Economic Council director Lael Brainard and National Security Council director Jake Sullivan on Monday are among government officials who are holding the meetings with Intel (NASDAQ:), Qualcomm (NASDAQ:) and Nvidia (NASDAQ:), the source said.

Earlier on Monday, the U.S.-based Semiconductor Industry Association (SIA) trade group called on the Biden administration to “refrain from further restrictions” on chip sales to China and urged the administration to allow “the industry to have continued access to the China market, the world’s largest commercial market for commodity semiconductors.”

The Biden administration is considering updating a sweeping set of rules imposed in October to hobble China’s chip industry and a new executive order restricting some outbound investment.

A White House National Security Council spokesperson said in response to SIA that “our actions have been carefully tailored to focus on technology with national security implications, and designed to ensure that U.S. and allied technologies are not used to undermine our national security.”

Not every official is expected to meet with every company, the source who spoke on condition of anonymity added.

On Friday, Reuters reported that the CEOs of Intel and Qualcomm were planning to visit Washington this week, according to two sources familiar with the matter.

The Commerce Department and White House declined to comment on any potential meetings.

China recently moved to restrict exports of raw materials such as gallium and germanium that are used in making chips.

Further rule-tightening by U.S. officials risks “disrupting supply chains, causing significant market uncertainty, and prompting continued escalatory retaliation by China,” the industry group said.

The group said it wants the administration “to refrain from further restrictions until it engages more extensively with industry and experts to assess the impact of current and potential restrictions to determine whether they are narrow and clearly defined, consistently applied, and fully coordinated with allies.”

Raimondo is overseeing a $39 billion semiconductor manufacturing subsidy program approved by Congress last year. The law also created a 25% investment tax credit for building chip plants, estimated to be worth $24 billion.