INDUSTRY BRIEF: Chinese industry bodies warning U.S. chips are “no longer safe”

Four major Chinese industry associations—representing the internet, semiconductor, automotive, and telecommunications sectors—issued a statement on Tuesday urging Chinese companies to exercise caution when purchasing U.S. chips, declaring that U.S. chips are “no longer safe.” The associations collectively represent 6,400 member companies.

These statements noted that escalating U.S. export restrictions could lead to supply chain disruptions and increased operational costs for U.S. companies, affecting the stable supply of U.S. chip products. The association called on its members to seek domestic or other foreign suppliers. Their advice could affect U.S. chipmaking giants such as NVIDIA (NVDA.US), AMD (AMD.US), and Intel (INTC.US) .

The move is seen as China’s determination to get rid of its dependence on U.S. wafers and highlights the growing fragmentation of the international supply chain, according to theFinancial Times.

The U.S. announced on Monday that it was restricting exports of wafer fabrication tools and high-bandwidth memory wafers (HBM) for AI to 140 Chinese companies. In response, China announced a ban on exports of gallium, germanium, antimony and superhard materials to the U.S., as well as stricter controls on graphite.

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