Semiconductor Export Controls Draw Chinese Legal Challenges
Chip companies described Chinese countermeasure risks, uncertain export licenses and harm to existing business.
Chip supplier Nvidia Corp (NVDA) linked compliance with U.S. export controls to a specific Chinese antitrust challenge in August, following its May warning about “shifting and expanding” restrictions on serving overseas customers. The company said Chinese antitrust regulators had preliminarily found in September 2025 that offering degraded products to comply with U.S. controls unfairly discriminated against Chinese customers and violated the terms of China's approval of its Mellanox acquisition.
Chip supplier Advanced Micro Devices Inc (AMD) described another route through which U.S. compliance could expose companies to Chinese action. The company said two regulations promulgated by China's State Council in 2026 expanded authorities' powers to investigate, restrict and impose countermeasures on foreign companies implementing foreign export controls. AMD warned that compliance with U.S. restrictions could leave it facing conflicting legal obligations, restrictions on Chinese operations and transactions, and supply-chain disruption. Nvidia's August warning also extended to possible foreign responses affecting its supply chain and customers “in all markets worldwide.”
Semiconductor supplier Marvell Technology, Inc. (MRVL) described uncertainty over future rules in May, saying the announced cancellation and replacement of the AI Diffusion Rule left unclear which products, technologies or software might be covered. In August, Marvell addressed the security of individual export permissions: some China licenses had been delayed or denied, future approvals were uncertain, and existing licenses “may be revoked” following U.S. policy changes. Its disclosures covered both the scope of replacement controls and the durability of permission already granted.
Semiconductor equipment supplier Lam Research Corp (LRCX) described business already affected. Its April warning said sales to customers in China “Have Been Impacted” and were likely to face material adverse effects from licensing requirements and other government actions. In August, Lam said expanded license requirements had limited its market, hurt revenue and increased exposure to foreign competition. China represented approximately 34% of revenue in both fiscal 2026 and fiscal 2025. China-exposed supplier KLA Corp (KLAC) likewise said failure to obtain export licenses had harmed its backlog and required the return of substantial customer deposits for Chinese purchase orders.
Arista Networks, Inc. (ANET), which uses integrated circuits in its products, retained an explicit qualification about easing. In both May and August, the company said certain U.S. export controls had been “partially relaxed since May 2025” through bilateral negotiations, with further changes possible. Both statements also warned that controls could restrict product exports, customer sales, access to certain chips and suppliers' use of covered facilities or equipment. The easing language remained accompanied by a warning about possible Chinese retaliation.
Semiconductor company Microchip Technology Inc (MCHP) retained the same warning in May and August that controls were increasingly complex and subject to discretionary interpretation, with requirements potentially changing through guidance, enforcement or licensing decisions. Chip company MaxLinear, Inc (MXL) described the work that changing controls could require: additional policies, procedures and due diligence to prevent diversion to China, Russia or other destinations, with possible additional costs and lost revenue. MaxLinear also said proposed worldwide licensing requirements for certain AI-training chips and computing resources had been rescinded, and that it expected revised controls could be issued in the future.
KLA's warning extended to its ability to support existing customers and supply covered products outside affected regions. The company said rejected license applications, additional restrictions or new regulatory interpretations could disrupt shipments and product development, and require it to move certain operations out of one or more countries.