ch
English
SEMI Urges U.S. to Ease Chip Equipment Export Controls
Semiconductor Industry News
July 3, 2026, 17:51
The International Semiconductor Equipment and Materials Association (SEMI) unexpectedly sent an official letter to U.S. Treasury Secretary Scott Bessent on July 1 (local time). For the world’s largest industry association representing over 3,000 semiconductor device, equipment, and materials companies, directly addressing the U.S. Treasury Secretary is highly unusual. SEMI’s membership includes the three global memory giants—Samsung Electronics, SK Hynix, and Micron—as well as companies like TSMC and Intel.
The core of the letter is a strong appeal for the U.S. government to comprehensively reconsider its unilateral, stringent semiconductor equipment and technology export control measures, which have been advanced without consensus from allied nations. In the letter, SEMI issued a stern warning, stating that “unilateral U.S. regulatory measures could undermine the predictability of global supply chains and ultimately prove counterproductive, weakening the technological leadership of U.S. semiconductor equipment companies in the long term.” While SEMI did not deny the necessity of regulation itself, it expressed serious concern over the lack of close multilateral coordination with key semiconductor allies, including Taiwan, South Korea, Japan, and the Netherlands. The association warned that such unilateral controls could lead to a scenario of “mutual destruction.”
The fundamental reason for SEMI’s collective action is the significant intensification of U.S. technology containment policies toward China since the start of Donald Trump’s second term. The U.S. has been implementing a series of strict export control measures to prevent cutting-edge semiconductor manufacturing capabilities—critical for artificial intelligence (AI) and high-performance computing (HPC)—from flowing into China.
In recent years, there has been a clear trend toward broadly expanding the Foreign Direct Product Rule (FDPR), thereby strengthening an “extraterritorial” regulatory framework that restricts third countries from exporting foreign-made equipment that incorporates even minimal U.S. technology or software. A key flaw in this trend is the insufficient coordination among allied nations throughout the process.
U.S. equipment companies have strongly protested what they term “reverse discrimination,” arguing that their market share in China is being eroded by overseas competitors such as Dutch firm ASML and Japan’s Tokyo Electron due to the U.S. government’s cumbersome and unilateral regulatory policies. On the other hand, countries and regions with advanced wafer fabrication and memory manufacturing bases, such as South Korea and Taiwan, face significant obstacles in planning facility investment strategies due to growing uncertainty in the supply of U.S. equipment and components. Essentially, the U.S.’s go-it-alone regulatory approach has pushed the fatigue of the entire allied semiconductor ecosystem to a critical point, ultimately triggering this letter.
U.S. Government May Adjust Pace but Maintain “Security First” Stance
Following receipt of SEMI’s letter, the official stance of the U.S. Treasury Department and the White House remains notably cautious. Treasury Secretary Scott Bessent has actively promoted a “manufacturing revival theory,” emphasizing the need to reduce supply chain dependence on foreign countries and reclaim U.S.-centric manufacturing hegemony. However, the fundamental principle that national security and competition for advanced technology dominance are non-negotiable remains firm.
Nevertheless, speculative views have emerged within the Treasury Department suggesting that completely ignoring ominous market warnings—that indiscriminate unilateral regulation could dangerously exacerbate uncertainty in the U.S. bond market and the broader macroeconomy—would be extremely difficult. The core reason is that the semiconductor equipment industry is capital-intensive and highly technology-dependent, meaning robust global demand is essential for U.S. companies to secure necessary R&D resources.
Thus, while the U.S. government is unlikely to relax controls in the short term, it may strategically pivot toward a “multilateral regulatory mechanism” in subsequent phases by pressuring allies to enforce equivalent levels of control. Currently, the U.S. is intensifying pressure on the Dutch and Japanese governments to raise the threshold for equipment export controls to China to match U.S. standards, a scenario viewed as one of the primary potential outcomes.
Impact on South Korea and the Global Semiconductor Industry
SEMI’s government letter is expected to serve as a critical turning point in the currently deadlocked global semiconductor supply chain negotiations, presenting South Korea’s semiconductor industry with a highly complex challenge. This must be navigated in a turbulent environment where unprecedented opportunities coexist with existential crises.
South Korea’s domestic memory giants, particularly Samsung Electronics and SK Hynix, remain highly sensitive to the direction of U.S. regulatory policies. If SEMI’s proposal is partially adopted—with the U.S. abandoning unilateral controls in favor of strengthened cooperation with allies and expanded exemptions (e.g., sales licenses)—South Korean companies might gain crucial short-term breathing room for equipment upgrades and logistical maintenance at their Chinese production bases in locations like Xi’an and Wuxi. Conversely, if the U.S. demands all allies participate in an equivalent regulatory system, South Korea could also face severe negative impacts, with stricter restrictions on semiconductor equipment and product exports to China.
Within the global macroeconomic landscape, as concerns persist over the U.S.’s unilateral application of the FDPR, a “de-Americanization” phenomenon could rapidly intensify. In this scenario, overseas semiconductor manufacturers would long-term strive to build supply chains entirely excluding U.S. software, intellectual property, and components. This aligns with SEMI’s grave warning that such policies could lead to the complete isolation of the U.S. equipment industry, ultimately achieving the opposite of the technological hegemony the U.S. initially sought.
SEMI’s letter to Treasury Secretary Scott Bessent transcends mere lobbying by vested interests; it vividly illustrates the potentially catastrophic destructiveness of a blind, nationalist regulatory framework imposed upon a semiconductor ecosystem meticulously built on a foundation of global labor division.
Semiconductors represent the ultimate embodiment of transnational collaboration, where no single sovereign nation can monopolize the entire process from initial architecture design to materials, equipment, manufacturing, and final packaging. The global semiconductor industry’s gaze is now fixed on Washington, awaiting whether the U.S. government will continue to disregard market appeals under the guise of security or heed SEMI’s advice and return to a “small-scale bilateral technology control framework” based on genuine coexistence with allies. Undoubtedly, this is a pivotal moment for South Korean semiconductor companies, which must closely monitor evolving U.S. policies while urgently advancing the dual goals of supply chain diversification and next-generation technology autonomy.
(Source: Compiled from businesskorea)
