Chip Industry Calls on Trump, Congress to Reassess Biden's Export Control Strategy

In a set of policy recommendations for the new administration and the Republican-controlled Congress, the Semiconductor Industry Association this month said the U.S. should consider shifting away from Biden’s chip-control strategy. It said U.S. rules issued by the last administration have placed broad, unilateral restrictions on exports and may risk pushing foreign customers toward technology made by countries with less onerous compliance rules.

“These regulations are reshaping semiconductor supply chains and the global competitive landscape for chips and downstream chips-consuming firms alike, causing too many customers around the globe to shift reliance to non-U.S. chips suppliers, and prompting retaliatory actions designed to degrade U.S. semiconductor competitiveness,” SIA said. Biden’s policies “require review and re-evaluation to assess whether they are achieving their intended objectives or whether they are hindering the U.S. technology base and our technology leadership.”

The Biden administration took several major steps to restrict sales of advanced chips and their equipment to China, including by publishing two new chip-related export control rules days before Trump took office (see 2501130026 and 2501150040). Trade groups asked Biden last week to stop those last-minute controls, saying they bypassed standard government rulemaking processes and were creating challenges for the chip industry (see 2501160061).

Trump should scrutinize those rules and others issued by Biden, SIA said. Export controls, outbound investment restrictions and other trade policies are “necessary tools for safeguarding national security,” but the trade group also said those measures may need to be better balanced with American commercial interests.

“The U.S. semiconductor industry is dependent on our companies’ ability to fulfill overseas demand,” it said, adding that about 75% of the American chip industry’s revenue comes from sales to foreign customers.

Trump and Congress should examine whether Biden’s export control rules “have achieved their specific national security and foreign policy objectives” or whether they have caused foreign companies to design-out American chip technology from their products in favor of “foreign alternatives.” They should then assess “whether other policy tools may be more effective,” SIA said.

It also called on the new administration to craft any new export controls narrowly and harmonize them with those of other countries that supply similar technologies. SIA suggested Trump ease export restrictions over trade with certain “trusted” U.S. allies to “expand the market base for Made-in-America chips.” The U.S. should also “avoid creating incentives for the development of new technologies outside the U.S., including by modernizing outdated controls,” and should allow plenty of time for U.S. companies to “build the necessary compliance capabilities” to adhere to any new restrictions.

SIA also asked the White House to stand up the “long-delayed” President’s Export Council Subcommittee on Export Administration, update the membership on the government's various technical advisory committees and create “other channels for regular engagement with industry leaders.” The Commerce Department announced plans last year to revive PECSEA -- whose charter had expired in 2019 (see 2311290061) -- although it’s unclear where that process stands (see 2401080008).

SIA outlined a host of other recommendations for the Trump administration, suggesting it “double down” on federal investments and incentives for American chip research and development, negotiate trade deals that create “preferential markets” for U.S. chips and electronics, put in place measures that allow the chip industry to attract and hire skilled foreign workers, and more.