China industry bodies urge ‘caution’ in buying US chips in reprisal to Biden sanctions

China’s state-backed bodies covering internet companies, semiconductor firms, automakers and communications network operators have called on their respective members to shun chips from US suppliers in an apparent retaliation against Washington’s latest sanctions, which could deal a blow to the mainland businesses of Nvidia, Qualcomm and Intel.

The four bodies – the Internet Society of China, the Chinese Association of Automobile Manufacturers, the China Semiconductor Industry Association and the China Association of Communication Enterprises – on Tuesday issued statements within minutes of each other, urging their members to be “cautious” about buying chips from American suppliers, following the Biden administration’s fresh sanctions.

The move reflects these industries’ concerns after the US government blacklisted another batch of Chinese semiconductor enterprises this week.

New measures, announced on Monday by the US Commerce Department’s Bureau of Industry and Security, impose export restrictions on 24 types of chipmaking equipment and three categories of software essential for semiconductor development.

Instead, Chinese internet firms should “expand cooperation” with semiconductor suppliers in other countries and regions, while actively using China-made chips, the society said. It counts some of China’s biggest tech companies as members, including Baidu, Alibaba Group Holding, Tencent Holdings, TikTok owner ByteDance, Huawei Technologies and Xiaomi. Alibaba owns the South China Morning Post.