December 4, 2022

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Leading European chip companies seek stability in US-China dispute

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Leading European chipmakers say they are looking for stability for their businesses in China as Washington’s export controls further complicate global supply chains.

The chief executives of STMicroelectronics, Infineon and NXP Semiconductors said Monday that while they comply with Washington’s export restrictions on China’s semiconductor sector, they have no plans to halt operations in the Asian country, the world’s second-largest economy.

The comments came during the CEO Roundtable special event at Electronica in Munich, one of the largest semiconductor trade shows in Europe.

“[China] accounts for approximately 30 percent of our total sales and this is the market that we do not want to miss, that we want to continue to support,” said Jean-Marc Chery, Chief Executive of STMicroelectronics. “We just want the world to give us stability. We can adapt to change, but when we’re changing every six months, it’s difficult.”

The US Department of Commerce launched a new round of export control measures in early October to curb China’s ability to build advanced computing and artificial intelligence by restricting access to US technology.

European companies that supply tools for chip production, such as ASML, and European chipmakers are less affected by the new regulations than American companies because their products for the Chinese market are based on mature chip production technologies rather than the advanced ones they are targeting in Washington.

Still, European chip companies are concerned that geopolitical uncertainties caused by rising tensions between Washington and Beijing could disrupt their operations in China. The Financial Times reported on Sunday that the Joe Biden administration was trying to forge a trilateral deal with Japan and the Netherlands to make it harder for China to build advanced chips for military use.

“[The new export controls] didn’t affect us. But of course nobody knows what the next one will look like,” said NXP boss Kurt Sievers on the sidelines of the FT event.

Sievers said that while NXP’s business in China is unaffected by the new rules, it has advised its U.S. employees to stop all communications with customers in China involved in semiconductor manufacturing since the rules went into effect last month be.

“We don’t know exactly how to read the rules, but we have an absolute obligation to comply with them at all times,” Sievers said. “So we took it very literally and carefully. It doesn’t change our business, but it does make working in China a little more complicated.”

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