"Why US Semiconductor Industry Leaders Flew to Washington: No Additional Restrictions on Mass Exports"

Meeting with Ministers of State and Commerce to Express Concerns over Revenue Impact
Pressuring with Association Statement and Meeting Think Tanks
"Influencing Delay in Announcing Actual Measures"

As the Biden administration in the United States attempted to introduce additional semiconductor export restrictions to China this year following measures implemented last October, it has been confirmed that American semiconductor companies such as Nvidia, Intel, and Qualcomm have actively lobbied to ease the severity of the restrictions and delay their timing.

They responded by pointing out the problems, arguing that the additional measures would not only hurt the short-term performance of U.S. semiconductor companies but could also provide China with an opportunity to develop semiconductor technology in the mid to long term, potentially shifting semiconductor dominance from the U.S. to China.

U.S. President Joe Biden (right in the photo) and Pat Gelsinger, CEO of Intel
[Image source=Reuters Yonhap News]

On the 5th (local time), The New York Times (NYT) reported, citing more than 20 sources familiar with the matter, that the three companies have been running campaigns to protect their businesses in relation to the U.S. government's export restrictions on China. The NYT stated that these efforts have continued since reports in June that the government was preparing additional measures related to Nvidia's artificial intelligence (AI) semiconductors.

This contrasts with the semiconductor industry's immediate alignment with the measures when the Biden administration first introduced them last October.

According to the report, representatives from the three companies met directly with U.S. government and White House officials, as well as think tank representatives, to persuade them.

After the possibility of additional measures was mentioned, in July, Intel CEO Pat Gelsinger, Nvidia CEO Jensen Huang, and Qualcomm CEO Cristiano Amon met with Secretary of State Antony Blinken and Secretary of Commerce Gina Raimondo in Washington, D.C. At this meeting, the three company leaders reportedly expressed concerns that a decline in revenue and profits from China could lead to reduced investment within the U.S.

China is considered a major player in the global semiconductor market. The combined annual revenue that Nvidia, Intel, and Qualcomm generate from China exceeds $50 billion (approximately 67.3 trillion KRW). They argue that if profits decline due to government measures, it will inevitably affect investments in semiconductor factory construction and job expansion currently underway in U.S. states such as Arizona, Ohio, and New York.

Additionally, on July 17, the Semiconductor Industry Association (SIA) issued a statement expressing concerns about the introduction of additional restrictions, which the NYT explained was the result of pressure from member companies. Although no member companies opposed the draft statement at the time, some reportedly expressed unease about issuing such a statement given the Biden administration's semiconductor support law.

[Image source=Reuters Yonhap News]

Sources revealed that some in U.S. political circles felt uncomfortable with the industry's response, especially considering that the semiconductor support law had created a $50 billion fund through taxes to support the semiconductor industry. There were even discussions in Congress about holding hearings to ensure that companies comply with export restrictions.

Nevertheless, U.S. companies appear to have actively responded. Nvidia CEO Huang, who is expected to be directly impacted by AI semiconductor export issues, met with leaders of prominent U.S. think tanks such as the Center for Strategic and International Studies (CSIS) and the Atlantic Council this summer to persuade them.

During this process, Nvidia reportedly questioned research by Gregory Allen, a senior fellow at CSIS who supported export restrictions, and rumors circulated in Washington, D.C. that Nvidia tried to influence his appointment. However, both CSIS and Nvidia denied these allegations and stated that no inappropriate actions took place.

Due to the semiconductor industry's active lobbying, the Biden administration reportedly delayed the timing of the additional export restrictions it intended to introduce, and the scope of the restrictions being prepared by the government was reduced.

However, a recent foreign media report citing U.S. government officials indicated that the U.S. government plans to announce additional semiconductor export restrictions on China. The report stated that the U.S. government has already warned the Chinese government that updates could be made around the 7th, marking one year since the initial export restrictions were introduced.

The NYT pointed out, "These corporate warnings reveal the inevitable tension between national security concerns and commercial interests and show the Biden administration caught in an unavoidable dilemma."

This content was produced with the assistance of AI translation services.