Illustration=ChatGPT DALL·E 3

Signs of change are emerging in the United States' semiconductor export regulations against China. There are analyses suggesting that President Donald Trump is likely to use negotiations to ease semiconductor export sanctions as a bargaining chip in securing Chinese rare earth minerals, which are critical for manufacturing. In fact, there are assessments in the industry that the recent suspension of semiconductor design software exports enacted by the Trump second administration at the end of last month indicates a shift in the tide.

Kevin Hassett, Chairperson of the National Economic Council (NEC) of the White House, noted in an interview with CNBC on the 9th (local time) ahead of the U.S.-China trade talks in London, "I hope for a short meeting that ends with a big, strong handshake," adding, "We expect that right after the handshake, U.S. export controls will be eased and rare earths from China will be supplied in large quantities." This officially indicated the willingness of the Trump second administration to put U.S.-China export controls on the negotiation table.

Hassett did not mention which specific export controls would be relaxed. However, he communicated that the current regulations on the export of high-performance chips from Nvidia would remain as they are. Despite this, there is a prevailing view in the industry that Trump's semiconductor policy toward China will differ from the increasingly tight approach of the Biden administration over time.

It is reported that the Trump team emphasizes that China has expressed its willingness to partially lift technology export controls aimed at China in exchange for relaxing its export restrictions on rare earths to the U.S. Bloomberg has cited sources familiar with the negotiation situation, reporting that the Trump second administration is prepared to lift export controls on semiconductor design software, jet engine parts, chemicals, and nuclear materials.

President Trump also claimed on the same day, "We want to open up China," stating, "Although China has unfairly treated the U.S. for a long time, no American president had the courage to respond to China before I imposed tariffs on China." The U.S. and Chinese delegations engaged in discussions for over six hours at the London meeting, with plans to continue negotiations the following day.

In the software sector, where export regulations against China have been applied, subtle changes are already being detected. Previously, the Trump second administration blocked access to essential automation (EDA) software for semiconductor design by Chinese corporations at the end of last month. Consequently, semiconductor design software developers such as Cadence Design Systems, Synopsys, and Siemens ceased providing services to Chinese clients.

However, following the call between President Trump and Chinese President Xi Jinping on the 5th, industry assessments suggest that the thresholds for EDA export regulations from the U.S. are being lowered. An industry source stated, "It appears that the technology support platforms of Cadence, Synopsys, and others that were blocked for Chinese chip design companies have been largely normalized," adding, "While these companies have not officially resumed services, it is clear that the atmosphere has changed." The stock prices of Cadence and Synopsys, which plummeted by about 12% at the end of last month due to export regulations, have recovered by 6 percentage points and 8 percentage points, respectively. Another industry source remarked, "Given the improvement in regulatory conditions in just a week, it seems that the Trump administration will continue negotiations by tightening semiconductor regulations, except for high-performance chips, and then relaxing them again."