By Eduardo Baptista and Brenda Goh
BEIJING (Reuters) -Chinese companies should be wary of buying U.S. chips as they are “no longer safe” and buy locally instead, four of the country’s top industry associations said on Tuesday in a rare coordinated response to Washington’s curbs on Chinese chipmakers.
The two nations have targeted each other’s economies in the last few days, escalating tensions even before U.S. President-elect Donald Trump returns to the White House in January. Trump has promised to impose heavy tariffs on imported Chinese goods, reviving a trade war from his first four-year term as president.
The industry association warnings came after the United States on Monday launched its third crackdown in three years on China’s semiconductor industry, curbing exports to 140 companies, including chip equipment maker Naura Technology Group.
Their advice could affect U.S. chipmaking giants like Nvidia (NASDAQ:), AMD (NASDAQ:), and Intel (NASDAQ:) which, despite export controls, have managed to keep selling products in the Chinese market. The three companies did not immediately respond to a Reuters request for comment.
The Semiconductor Industry Association, a U.S. trade association representing major chipmakers, said, “Coordinated calls in China to limit procurement of U.S. chips are unhelpful, and any claims that American chips are ‘no longer safe or reliable’ are simply inaccurate.”
The group reiterated its belief that “export controls should be narrow and targeted to meet specific national security objectives. … We encourage both governments to avoid further escalation.”
“China had been moving quite slowly or carefully in terms of retaliating against moves by the United States, but it seems pretty clear that now the gloves are off,” said Tom Nunlist, associate director at research firm Trivium China.
The associations cover some of China’s largest industries, including telecommunications, the digital economy, autos, and semiconductors and combined count 6,400 companies as members.
The statements, released shortly after each other, did not detail why U.S. chips were unsafe or unreliable.
Beijing on Tuesday also banned exports of rare minerals used in military applications, solar cells, fibre optic cables and other manufacturing processes. A White House National Security Council spokesperson said the U.S. would take necessary steps to try to deter other “coercive actions” from China and continue efforts to diversify supply chains away…
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