Headline, October 09 2023/ ''' CHIP MAKERS CHIP '''


CHIP MAKERS PUSH BACK ON BIDEN'S CHINA AGENDA. US companies are campaigning to protect their businesses.

A year after the Biden administration took its first major step forward restricting the sale of semiconductors to China, it has begun drafting additional limits aimed at denying Beijing the technology critical to modern-day weapons.

But in recent months, its progress has been slowed as American chips companies have pushed back with a blunt warning :

Cutting sales to China would gut their businesses and derail the administration's plan to build new semiconductor factories in the United States.

Since July, Nvidia, Intel and Qualcomm, three of the largest chip makers, have pressed their case that cracking down on China would have unintended consequences.

They have challenged the White House's national security wisdom in meetings with officials like Secretary of State Antony J. Blinken and Commerce Secretary Gina M. Raimondo, wooed think tanks and urged leaders across Washington to reconsider additional chip controls. 

The companies have warned that a U.S. pullback could accelerate China's development of an independent chip industry, paving the way to a world dominated by Chinese-created chips rather than American designed chips.

'' What you risk is spurring the development of an ecosystem that's led by competitors,'' said Tim Teter, Nvidia's general counsel, who has helped lead the lobbying campaign.

'' And that can have a very negative effect on the U.S. leadership in semiconductors, advanced technology and A.I.''

The campaign has contributed to the delay of new restrictions and narrowed the list of changes that the administration may make, two people familiar with the process said.

But representatives for the Commerce Department and the National Security Council, which lead the role making process, said the agencies were committed to protecting sensitive technology.

'' The timing and scope of export control decisions are carefully designed to have the maximum impact,'' said Sarah Weinstein, a spokeswoman for the Commerce Department.

The push by the big chip companies have rankled some national security experts, lawmakers and semiconductor rivals.

Many favor confronting Beijing and find it distasteful that the companies have questioned the White House shortly after the government committed $50 billion to the industry through the CHIPS and Science Act.

The 2022 measure provided more money to bolster American chip manufacturing and counter China.

Representative Mike Gallagher of Wisconsin, the Republican chairman of a select committee on U.S. Chinese competition, has discussed holding a hearing with chip companies to question their compliance with export controls.

The warnings from the companies speak to the tension between national security concerns and commercial interests and highlight an unavoidable quandary for the Biden administration :

The economic interdependence of the United States and China, which has roots stretching back decades, means that any action by Washington to confront Beijing risks causing harm at home.  

China accounts for about a third of the global semiconductor market and more than $50 billion in combined annual revenues for Nvidia, Intel and Qualcomm.

The companies have cautioned that losing that revenue could force cuts in technology development, jobs and spending on semiconductor factories in Arizona, Ohio and New York.

Last year, the industry tacitly accepted the restrictions that the administration issued on Oct.7, shortly after President Biden signed the CHIPS Act. Companies adjusted their businesses.

Nvidia developed a version of its signature artificial intelligence chip, the H100, for China by reducing its performance power below the maximum levels that the rules allowed.

But losses associated with the restrictions mounted. China banned the sale of some products from Micron Technology, an American memory chip company 

National security experts in Washington identified shortcomings with the limits. And administration officials started questioning whether Nvidia's chip for China contravened the spirit of the rules.

IN JULY, industry executives were alarmed by the talk that the administration was close to expanding its limits by banning Nvidia's sales of the A.I. chips it developed for Chinese use, among other changes.

They worried that the administration could also single out Nvidia's and Intel's sales to subsidiaries of Inspur Group, a Chinese conglomerate with military ties, and Qualcomm's sale of 4G mobile chips to the Chinese telecom giant Huawei which had a special permit to supply, two industry executives said.

The Honour and Serving of the Latest Global Operational Research on Chip Manufacturing, Supply and Demand, and Geostrategic issues continues. The World Students Society thanks authors Tripp Mickle, David Mccabe and Ana Swanson.

With respectful dedication to the Students, Professors and Teachers of the world. See You all prepare for Great Global Elections on The World Students Society : wssciw.blogspot.com and Twitter X - !E-WOW! - The Ecosystem 2011 :

Good Night and God Bless

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