Qualcomm to BIS: Avoid ‘Unilateral’ Export Controls Amid ‘Historic’ Chip Crunch
Qualcomm supports “targeted and rule-based export controls” as one of several long-term federal policy recommendations for curing the semiconductor shortage, it said in comments posted Wednesday in docket BIS-2021-0036. Submissions were due Nov. 8 in the Bureau of Industry and Security's request for information to help the secretaries of Commerce and Homeland Security prepare a report to the White House on the chip crunch by the one-year anniversary of President Joe Biden’s Feb. 24 executive order (see 2109230038).
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Washington should “control emerging technologies,” consistent with the 2018 Export Control Reform Act, "by imposing targeted and rule-based export controls and avoid disrupting semiconductor supply, especially in legacy node chipsets,” said Qualcomm. “Unilateral controls would only hinder Qualcomm and other U.S. companies from selling in foreign markets, undermining their R&D investments and disadvantaging them against their foreign competitors.” Some international rivals already have “both the technology capability and funding to develop global leadership in these areas,” it said.
Unlike previous chip shortages in which production “of only select nodes were constrained,” Qualcomm “has experienced constraints from its manufacturing partners across all nodes from legacy to leading-edge” during the current crisis, said the company. “During the peak of the current shortage, there was not a single node where there was more supply than demand,” it said. “We have experienced the same dynamics that the overall semiconductor industry has, with demand outstripping supply in every area of Qualcomm’s chip business.”
Short-term periods of “undersupply” are part of the semiconductor industry’s “standard cycle,” said Qualcomm. Those undersupply periods “do not by themselves suggest a major deficiency in the semiconductor supply chain nor in the industry’s ability to increase supply to meet demand,” it said. But the “main difference” between this shortage and past crises is that “the magnitude of the current increase in demand has been unprecedented and unanticipated because of the COVID-19 pandemic and the subsequent increased reliance on semiconductor-run devices,” it said.
The semiconductor industry responded to the “historic” demand increase “with historic output,” said Qualcomm. More semiconductors were sold in 2021's Q3 “than in any quarter in the history of the industry,” and total semiconductor sales this September “were the highest ever in a month,” it said. “Yet even these historic numbers have not kept up with the unexpected and historic levels of demand.”
Chipmakers “are working around the clock to ramp up production by every possible means in the short-term,” commented the Semiconductor Industry Association. Fabs are producing semiconductors at rates “well-above pre-pandemic levels,” but supply chain challenges “do persist,” SIA said.
The global chip shortage “simply cannot be resolved with top-down government-directed efforts to allocate limited supply in the immediate-term,” said SIA. “Misallocation is not at the heart” of the current crisis, it said. “Precipitous and fundamental changes to market demand” are to blame “in the wake of an extraordinary event in the history of our industry, nation, and global economy,” it said.
Demand for chips “is increasing across the board and capacity will have to expand everywhere, including in the U.S., to meet the needs of the present and the future,” said SIA. “The chip shortage requires a long-term, comprehensive solution aimed at strengthening the entire global semiconductor ecosystem and securing continued U.S. leadership in technological innovation and capacity in close partnership and coordination with our allies.”