Beijing Summit Puts Two Variables on the Table for Lam Research — Chip Export Controls and the Rare Earth Truce
The Trump-Xi Beijing summit put two critical variables in focus for Lam Research: whether chip export controls ease, and whether the rare earth supply truce gets extended before its fall 2026 expiry. Both remain unresolved heading into the September White House summit.
- Chip export controls were not discussed at the Trump-Xi Beijing summit, and the rare earth supply truce faces uncertain renewal ahead of its fall 2026 expiry
- Lam Research, exposed to both variables, faces sustained policy uncertainty until the September White House follow-up summit
Trump and Xi held a two-day summit in Beijing May 13-14, joined by Jensen Huang, Elon Musk, Tim Cook, and execs from Micron, Qualcomm, and Lam Research. Two variables dominate the outlook for semiconductor equipment makers: chip export controls and the rare earth supply truce. Both remain unresolved heading into the September White House follow-up.
President Trump wrapped up a two-day Beijing summit calling the talks "fantastic" and inviting Xi to the White House in September. Few concrete agreements were disclosed. The CEO delegation — Jensen Huang (Nvidia), Elon Musk (Tesla), Tim Cook (Apple), plus execs from Micron, Qualcomm, Coherent, and Illumina — signaled that technology was front and center. It was the first US presidential visit to China in roughly a decade.
Every Major Tech CEO on One Plane
Jensen Huang's inclusion was a last-minute call. He had initially hesitated, worried that a chipmaker's presence in Beijing risked "awkward conversations" about Nvidia's push to sell advanced chips to China. Trump personally asked him to join. Huang boarded Air Force One at an Alaska refueling stop and was photographed at Trump's side throughout the welcome ceremony.
- Delegation: Jensen Huang (Nvidia), Elon Musk (Tesla), Tim Cook (Apple), Micron, Qualcomm, Coherent, Illumina
- Xi Jinping: "China's doors will open wider" (Xinhua)
- Trump invited Xi to the White House in September — second summit expected
- First US presidential visit to China in ~10 years
Chip Export Controls — "Not Discussed" at the Meeting
The sector's biggest question was whether Nvidia's H200 chips would get a sales license for China. The answer was no — at least not yet. US Trade Representative Jamieson Greer told Bloomberg TV that chip export controls were "not discussed" at the bilateral meeting. A licensing deal would be "politically explosive," triggering fierce backlash from China hawks in Congress, said Heidi Crebo-Rediker of the Council on Foreign Relations.
Nvidia's China AI chip market share has fallen from roughly 90% to zero percent today. Huang has pegged the China market at $50 billion. A House committee recently advanced legislation requiring congressional review of chip sales to countries including China and Iran — a significant constraint on executive flexibility.
A licensing deal for H200 chips would be politically explosive and trigger fierce backlash from China hawks in Congress.
Heidi Crebo-Rediker, Council on Foreign Relations
Rare Earth Truce — Expires This Fall, Extension Uncertain
The other variable is the rare earth supply truce. The US and China agreed last October to suspend Chinese rare earth export restrictions as part of a broader trade truce. That deal expires this fall. Greer said "we'll see" when asked about extension, while noting rare earth flows from China have been at "better levels, sometimes slow." China controls roughly 85% of global rare earth processing and over 90% of permanent magnet production — leverage it has used before and will use again.
- Rare earth truce expires: fall 2026
- China controls: 85% of rare earth processing, 90%+ of magnet production
- US Project Vault stockpile program underway — but years from supply independence
- Greer: extension possible but flows "sometimes slow"
Lam Research — Exposed to Both Variables
Lam Research makes wafer fabrication equipment — etch and deposition tools that sit at the core of every chip manufacturing process. The company faces two policy variables simultaneously. If export controls tighten further, Lam cannot sell equipment to Chinese fabs. If the rare earth truce expires without renewal, Lam's own manufacturing supply chain faces disruption.
The upside case runs in both directions too. If export controls ease and the rare earth truce extends, Chinese fabs restart capex spending and Lam's order book grows. LRCX and peer semiconductor equipment stocks posted gains when the Beijing summit was announced — a clear signal that markets are pricing in some probability of a policy thaw.
September White House Summit — The Real Negotiations
Most observers view Beijing as a stage-setting exercise rather than a deal-making session. Both sides confirmed broad directions — trade and investment forums, AI dialogue — without locking in specifics. The real negotiations run toward the September White House visit. For semiconductor companies, the second half of 2026 will carry the highest policy volatility of the year.
Lam Research and semiconductor equipment stocks are the most direct policy barometers of the US-China trade relationship. The upside is real if both export controls and the rare earth truce move favorably. But uncertainty persists on both until September. Tracking the September summit outcome is not optional for anyone holding positions in this sector.
Frequently Asked Questions
Were chip export controls eased at the Beijing summit?
No. US Trade Representative Greer confirmed chip export controls were not discussed at the bilateral meeting. An H200 sales license for China would be 'politically explosive' given backlash from Republican China hawks in Congress. Specific chip policy discussions are expected to continue toward the September White House summit.
What happens to Lam Research if the rare earth truce expires?
Lam Research uses rare earth materials in its wafer fabrication equipment manufacturing. If China reinstates export restrictions, Lam faces higher costs and supply chain instability. The truce expires in fall 2026, and extension remains uncertain — Greer called flows 'sometimes slow' even under the existing agreement.
Why did Jensen Huang join the trip at the last minute?
Huang initially hesitated, worried that Nvidia's presence would invite 'awkward conversations' about selling advanced chips to China — a politically sensitive topic amid congressional pushback. Trump personally requested he join at the last minute, and Huang boarded Air Force One during an Alaska refueling stop.
What will be decided at the September White House summit?
The September summit is expected to address the issues left unresolved in Beijing: potential chip export control adjustments, rare earth truce renewal, and an AI cooperation framework. Both sides signaled willingness to negotiate, but specifics were deferred to the fall meeting.
What is the upside for semiconductor equipment stocks if US-China tensions ease?
If export controls loosen, Lam Research and peers like ASML and Applied Materials could resume equipment sales to Chinese fabs. China continues to invest heavily in expanding domestic chip production capacity. A regulatory thaw would likely produce near-immediate order book gains for equipment makers.
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