Defense officials reportedly are seeking to place restrictions on the Wi-Fi industry, due to possible interference between wireless signals and military radar.

Wi-Fi, or wireless fidelity, which lets home users connect a range of devices without cords to the Internet, is seen as one of the few potential growth spots in an otherwise depressed semiconductor and communications-equipment industry. But defense officials reportedly are looking to curtail Wi-Fi technology, saying in-home wireless transmitters may interfere with wireless signals employed by military radar, hence undermining national security, according to a

New York Times

report.

Fearing the potential long-term impact of such a move, technology companies including

Microsoft

(MSFT) - Get Report

and

Intel

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met with Department of Defense officials last week to discuss the problem, according to the

Times

report.

Specifically, the Pentagon is urging the FCC to delay a plan to make more airwaves available for a range of devices including cordless phones and Wi-Fi gear in homes, cafes and retail outlets. Last month, Sen. Barbara Boxer (D., Calif.) and Sen. George Allen (R., Va.) said they planned to introduce a bill to help spur the rollout of Wi-Fi connections.

FCC and Defense Department official didn't return calls seeking comment.

Last week, the FCC chairman, Michael Powell, and the National Telecommunications and Information Association administrator, Nancy Victory, met to coordinate efforts to discuss spectrum-conflict issues among wireless concerns.

"The Department of Defense understands that spectrum is a vital national resource and that defense needs must be balanced with other national needs, such as economic concerns," said Victory. "The Department of Commerce will continue to work closely with industry and defense interests to find a solution that accommodates the spectrum needs of both of these important communities."

While any restrictions or delays could have a long-term impact on the Wi-Fi industry, investors sent shares only moderately lower after the news Tuesday.

Intel

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, which is campaigning to dominate the market for Wi-Fi chips, fell 1.8% to $17.89. Wireless chip maker

Intersil

(ISIL)

shed 3.7% to $15.45. Shares of

Cisco

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, the largest provider of Wi-Fi gear, lost 0.3% to $13.66. Symbol Technologies lost 2.1% to $8.86. Amid news of a restructuring, shares of communications-gear maker

Proxim

( PROX) tumbled 12% to $1.03.