Integrated circuits on a circuit board. The semiconductor industry has been in focus during the U.S.-China trade war.

The semiconductor industry is facing a "profound" threat from geopolitics, according to the president of industry association SEMI China, Lung Chu.

The sector is already seeing a slowdown in the midst of challenges such as inventory issues, slowing demand for smart devices and falling memory chip prices. Now, the tensions between the U.S. and China threaten to worsen the situation.

"The geopolitical risk is a major uncertainty," Chu told CNBC's "Street Signs" on Thursday.

He said the technology control as well as export restrictions on Chinese tech giant Huawei "could have a more profound impact to the industry, fundamentally changing even the global supply chain."

The U.S. and China have been locked in a trade war for more than a year now.

In May, Washington placed Huawei on a blacklist that prohibits American firms from doing selling parts to the Chinese telecommunications giant without permission. Shortly after, the U.S. offered Huawei a 90-day reprieve and allowed U.S. businesses to continue selling limited products to the Chinese telecom. That deadline was extended by another 90 days in August.