Semiconductor Industry Backs Trump’s China Probe

SAN FRANCISCO — The semiconductor industry’s largest trade group reacted quickly to a memorandum by U.S. President Donald Trump authorizing the investigation of China’s trade practices, offering support and saying it has long voiced concern over “market-distorting” aspects of China’s industrial policy.

“The U.S. semiconductor industry stands ready to work with the Trump Administration to protect American intellectual property and critical technology from theft or forced transfer in foreign markets,” said John Neuffer, president of the Semiconductor Industry Association (SIA), in a press statement released Monday.

Neuffer’s statement was issued shortly after Trump announced the memorandum in widely televised event at the the White House. The memorandum directs U.S. Trade Representative Robert Lighthizer to investigate China’s laws, policies practices and actions that may be unreasonable or discriminatory and that may be harming American intellectual property, innovation and technology.

“This is just the beginning,” Trump said of the memo.

China’s stance on intellectual property rights has long been criticized by the semiconductor industry and other U.S. high-tech industries. Chip makers have complained about being enticed by the Chinese government to establish joint ventures with local companies as a condition for setting up manufacturing in China, which they say ultimately results in intellectual property theft.

John Neuffer

“While China is an important part of the global semiconductor value chain, SIA has long raised concerns about market-distorting aspects of its state-led industrial policy — such as forced technology transfer practices — that disadvantage U.S. companies and imperil their IP,” Neuffer said in Monday’s statement. “A balanced, fair, objective and thorough investigation aimed at ensuring that China meets its global trading obligations and that market forces determine competitive outcomes will be helpful to address these market-access issues.”

A White House statement issued Monday said China has implemented laws and taken actions that encourage the transfer of American technology and intellectual property to Chinese firms. For example, the statement said, “U.S. companies can be required to enter into joint ventures with Chinese companies if they want to do business in China, resulting in Chinese companies forcibly acquiring U.S. intellectual property.”