U.S. chip manufacturing industry is in action, expecting to prevent worsening export restrictions on Huawei

At the end of last month, Reuters reported that senior officials from various agencies of the US government were discussing amendments to The Foreign Direct Product Rule. Compared with the U.S. Department of Commerces inclusion of Huawei in the “Entity List” last May, the new rules will be more restrictive: even if the chip is not developed and designed in the United States, if a link in a foreign production line involves the use of a U.S. device, its chip Production also needs to be approved by the US government before it can provide chips to Huawei.

As soon as the news came out, some analysts said that this would be another substantial blow to Huawei's global chip supply chain. TSMC and other companies that supply chips and equipment to Huawei will bear the brunt. Huawei also responded to this at its 2019 annual report press conference held on March 31. Huawei ’s rotating chairman Xu Zhijun pointed out that if the United States changes the rules arbitrarily, it will destroy the global supply system ecology, and once this Pandora ’s box is opened It is possible that more than one Huawei company is destroyed by the chain effect. Now, the latest news from Reuters reveals that the US chip manufacturing industry is acting to delay the revision of export rules.

Figure 丨 Reuters latest report (Source: Reuters)

The report pointed out that industry organizations are taking action because it will affect some American chip manufacturing companies selling products and technologies to China. At the same time, industry organizations also emphasized that chips are also playing a role in the medical field at the time of the spread of the epidemic effect. In a letter sent on Monday, nine groups stated that before putting the new rules into practice, US Secretary of Commerce Wilbur Ross should allow and refer to public comments to avoid unintended consequences.

The industry groups that signed the letter include the Semiconductor Industry Association, the National Foreign Trade Council, the International Semiconductor Manufacturing Equipment Association (SEMI), and six other related organizations. The letter also mentioned that the changes to the new rules "will have a major impact on the semiconductor industry, global supply chain, and the broader technology sector."

(Source: MIT Technology Review)

Moreover, in the face of the public health crisis of all human beings in the New Corona Epidemic, "semiconductors support the functions of advanced medical equipment to help health professionals treat patients", and they also help achieve remote office work. The stability of the semiconductor industry may affect this public health crisis. Prior to this letter, Ajit Manocha, President and CEO of SEMI, also wrote to President Donald Trump, saying that the new changes will have a negative impact on the export of U.S. chip manufacturing equipment, and some businesses can bring more than $ 20 billion in revenue. Ajit Manocha said that revising the direct product rules "will inhibit further investment and innovation in the United States and bring about changes in American technology and components."

John Neuffer, President and CEO of the American Semiconductor Industry Association, also wrote in a blog post that semiconductors also play an important role in medical equipment, power grids, and other necessary infrastructure, "You must ensure that semiconductors and related supply chains Continuity to support the expanding range of digital services in the coming weeks and months. Due to the high globalization of the semiconductor supply chain, the shortage of semiconductors caused by operating restrictions in one region cannot be easily compensated by production in other regions. " .