US semiconductor industry presses Biden to refrain from more China curbs

Washington, DC [US]: The US-based Semiconductor Industry Association called on President Joe Biden’s administration to ‘refrain from further restrictions on chip sales to China, reported Al Jazeera.

This came as the chief executives from the biggest US semiconductor firms planned to visit Washington this week to press their views on China’s policy.

The trade group’s statement came on Monday as the the Biden administration considers a set of export controls banning Chinese companies from buying advanced chips and chip-making equipment without a license, as well as, a new executive order restricting some outbound investment.

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

The trade group said that further rule-tightening by US officials risks “disrupting supply chains, causing significant market uncertainty and prompting continued escalatory retaliation by China”, according to Al Jazeera.

The industry group further 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”.

Chips are vital for everything from smartphones and self-driving cars to advanced computing and weapons manufacturing. US officials have talked about the move as a measure to protect national security interests. And to make it more effective the US needed other key suppliers, located in the Netherlands and Japan, to join them and they did.

China eventually retaliated. In April, it launched a cybersecurity probe into Micron before banning the company from selling to Chinese companies working on key infrastructure projects. On July 10, Beijing announced the restrictions on gallium and germanium, as per CNN Business.

The export controls have drawn comparisons with China’s reported attempts in early 2021 to restrict exports of rare earths, a group of 17 elements for which China controls more than half of the global supply.

Gallium and germanium do not belong to this group of minerals. Like rare earths, they can be expensive to mine or produce.

This is because they are usually formed as a by-product of mining more common metals, primarily aluminium, zinc and copper, and processed in countries that produce them.

According to the US Geological Survey, China is the world’s leading producer of both gallium and germanium as it accounted for 98 per cent of the global production of Gallium and 68 per cent of the refinery production of germanium.

As per the US Geological Survey, the United States is dependent on China for these two critical elements. It imported more than 50 per cent of the gallium and germanium it used in 2021 from the country