Chip industry groups slam expected rules in private letter to Biden

By Stephen Nellis

(Reuters) – A half-dozen trade groups from the semiconductor and manufacturing industries sent a private letter to U.S. President Joe Biden complaining that new export controls expected this week were rushed through without consulting them.

The Biden administration on Monday released regulations on where computing chips from Nvidia (NASDAQ:) can be placed around the world, setting up a three-tier system in which most nations will need to obtain licenses to build AI data centers with U.S. chips.

In a letter to Biden dated January 13 that was not released publicly, trade groups including the Semiconductor Industry Association, which represents chip firms, and SEMI, which represents firms that make tools to manufacture chips, complained about that rule as well as another rule that could come as early as 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 said.

“Again, these pending regulations have been developed without appropriate industry consultation or the opportunity for public comment, despite their long-term impacts and economic and international significance.”

The SIA and SEMI did not immediately respond to a request for comment.

High-bandwidth memory, currently manufactured by U.S. and Korean firms, is a critical ingredient to building advanced AI chips, and the rule would restrict its sale to China.

A source familiar with the expected rules said they could also reverse an earlier interpretation of the rules that allowed companies such as Lam Research (NASDAQ:), which supplies equipment to memory chip makers in China, to bring in hundreds of millions more dollars in revenue than it had previously anticipated.

Lam did not immediately respond to a request for comment.