u.s. commerce secretary criticizes chip restrictions on china
Washington, D.C., Monday, 23 December 2024.
Commerce Secretary Gina Raimondo has voiced concerns over the effectiveness of restricting China in the semiconductor industry. She stated that such efforts have not successfully hindered China’s technological advancements. Raimondo highlighted the importance of innovation and investment in maintaining U.S. leadership in the chip industry. The focus, she suggested, should be on funding domestic innovation rather than relying solely on export controls. This position impacts major semiconductor companies like NVIDIA, which depend on competitive technology policies. Raimondo’s remarks emphasize the need for a strategic approach, balancing defensive export controls with proactive domestic investment. This reflects the Biden administration’s broader technology strategy, which includes the CHIPS and Science Act, allocating $53 billion to boost U.S. semiconductor manufacturing and research.
Market impact and industry response
The Commerce Secretary’s comments have significant implications for semiconductor industry stocks. The CHIPS and Science Act has allocated $53 billion for domestic semiconductor manufacturing and innovation [1][2]. Major manufacturers like Intel have received substantial federal support, with nearly $8 billion in subsidies [2]. However, Intel’s recent performance raises concerns, with the company implementing a 15% workforce reduction and suspending shareholder dividends in 2024 [2].
Strategic shift in us policy
Raimondo emphasized that while restricting sensitive technology access remains important, export controls merely slow China’s progress rather than halt it [2][3]. The Biden administration’s approach combines defensive export controls with aggressive domestic investment [3]. This dual strategy comes as the U.S. recently expanded restrictions on December 2, 2024, adding 140 Chinese companies to the Entity List [4][5].
Future policy considerations
The policy landscape faces uncertainty with the upcoming administration change. Former President Trump, set to return to office, has criticized the CHIPS Act as ‘terrible’ and favors using tariffs to encourage domestic manufacturing [2]. This potential shift in approach has created concern among industry stakeholders about policy continuity [3][5]. The semiconductor industry awaits clarity on how these competing strategies will affect global supply chains.