Hope for Nexperia resolution after U.S.-China talks

Leaders agreed on a temporary truce on export and rare-earth controls, but patent fights threaten chip production in the interim.

After months of escalating trade tensions, the semiconductor industry is finally getting its long-needed reprieve. At least temporarily. After Presidents Xi and Trump met, the United States and China agreed to a one-year pause on recent export control expansions, including the contentious “50% rule” that would have broadened restrictions on affiliates of listed Chinese entities. Likewise, China has delayed new rare-earth export limits, offering short-term relief to firms reliant on these critical materials, including those in the semiconductor industry. This interim truce provides much-needed breathing room for dozens of organizations after weeks of escalating tit-for-tat moves.

At the same time, the semiconductor industry never stays stable for long. Adeia’s new patent lawsuit against AMD, which targets key hybrid bonding and advanced process technologies, could introduce fresh complications depending on its resolution. Meanwhile, procurement teams are under pressure to ensure supply continuity during a tumultuous time for the industry.

Export controls hit the pause button after China-U.S. trade meeting

After months of escalating regulatory jabs, Washington and Beijing have finally hit the brakes. Following a round of high-stakes negotiations in Malaysia late last month, the two nations agreed to a one-year moratorium on new export control measures. For the semiconductor industry, the truce comes at a critical time.  

At the center of the détente is the controversial Affiliates Rule or “50% rule,” a policy shift that would have significantly expanded export licensing requirements by including foreign affiliates of companies on the U.S. Entity List. Industry groups, led by The Semiconductor Industry Association (SIA), warned that the measure’s broad scope would cause outsized collateral damage in the global chip supply chain. According to SIA, the rule also risked handing global market share to non-U.S. competitors, particularly in countries not aligned with American trade restrictions.  

However, the U.S. decision to step back isn’t a pro bono gesture. China agreed as part of the negotiations to pause the implementation of its new rare-earth export controls, which were set to tighten access to materials essential for chipmaking and a host of other high-tech industries. Rare-earth inputs, permanent magnets, and associated processing equipment were all destined for rigid trade restrictions under new rules outlined by China’s Ministry of Commerce last month.

While the temporary suspension gives the industry some breathing room, many analysts expect Beijing to come back to the controls as a crux of future negotiations. Treasury Secretary Scott Bessent’s comments as recently as last week claiming recent talks wouldn’t affect the U.S.’s stance on the 50% rule show how potent China’s leverage is thanks to its dominance of the global rare-earth ecosystem.  

Even so, the temporary agreement is being hailed as a pragmatic course correction for an otherwise turbulent industry. But experts caution it shouldn’t be treated as anything other than a fleeting truce.  

The one-year pause buys valuable time, but it doesn’t address or solve the underlying tension in trade relations between the U.S. and China. If the U.S. doesn’t develop future controls in tandem with allied economies to counterbalance China’s influence in rare earths, the goal of restricting access to sensitive technologies without harming domestic companies could be undermined.

For companies caught in the middle, the situation remains fluid. The hope is that this trade thaw creates a window for diplomatic resolution. But supply chain teams would be remiss to assume business as usual.

Organizations should instead use this opportunity to shore up their supply chains and prepare for future turmoil. Sourceability can help identify alternative sources for components at risk of geopolitical disruption. Our team of experts can also help customers create a multi-sourcing plan and alternative BOM options to hedge against new restrictions or those reinstated when this pause ends.  

As the industry digests this development, some are hoping the geopolitical respite could create space for resolving other disputes, including the tension surrounding Nexperia. With the U.S. and China seemingly back at the negotiating table on honest terms, analysts are cautiously optimistic that progress on export licensing may come sooner than later.  

Adeia sues AMD over semiconductor patents

Just as geopolitical pressures show signs of easing, the semiconductor industry faces a new, albeit familiar, source of disruption: intellectual property litigation. On November 3, Adeia filed a suit against AMD in U.S. federal court, alleging infringement of ten patents tied to hybrid bonding and advanced-node manufacturing. While Adeia emphasized its preference for licensing agreements, the company made clear it is prepared to litigate if necessary.

The timing of this development is notable as chipmakers are racing to implement advanced 3D stacking technologies for AI applications. Hybrid bonding has emerged as a critical enabler for the higher-density, lower-power designs necessary to support the demanding compute needs of AI infrastructure. Adeia’s portfolio is rooted in die-to-die and wafer-level packaging involved in HPC, AI accelerators, and modern SoC integration techniques.  

If the lawsuit is upheld, the patents in question could implicate a significant swath of AMD’s current production chips and its future roadmap.  

For AMD, the stakes are high. A negative outcome could lead to hefty licensing fees and penalties at best or court-ordered injunctions and costly redesigns at worst. The latter could delay orders and future production with little warning. Although litigation timelines are ambiguous, the immediate uncertainty is already being felt by OEMs and buyers further down the supply chain.  

Procurement teams now face the task of assessing whether any of their inbound components are built using packaging technologies that could be caught in the legal crossfire. As packaging takes on a more central role in system performance, IP risk promises to be a more common cause of disruption if not monitored.  

Sourceability’s market intelligence tools and Datalynq component analytics can help customers identify potential exposure to flagged technologies. If redesigns or supplier transitions become necessary, our team can support BOM adjustments, vet alternate sources, and minimize disruption risk across design and production cycles.