US tightens chip export controls

The House Foreign Affairs Committee advanced the MATCH Act on April 22, moving Congress toward tighter export controls on chipmaking gear sold into China. (foreignaffairs.house.gov) (reuters.com) The bill targets the machines used to make advanced semiconductors, not just the chips themselves. Its sponsors say Chinese production still depends on U.S. and allied tools, parts and service support. (foreignaffairs.house.gov) The immediate backdrop is a March 19 Justice Department case accusing three people tied to Super Micro Computer of helping divert at least $2.5 billion of U.S. artificial-intelligence server technology to China. Prosecutors named co-founder Yih-Shyan Liaw, sales manager Ruei-Tsang Chang and contractor Ting-Wei Sun. (reuters.com) According to prosecutors, the servers were routed through Taiwan and Southeast Asia, then moved into unmarked boxes before shipment to China. Officials said labels and serial numbers were transferred with hair dryers to conceal the real machines. (reuters.com) That case sharpened a problem Washington has been chasing since 2022: controls can block direct sales, but resellers, service contracts and overseas facilities can still create paths around them. The MATCH Act is written to close some of those gaps. (reuters.com 1) (reuters.com 2) An earlier April draft alarmed equipment makers because it was broader and more punitive. A revised version seen by Reuters dropped some countrywide restrictions but kept a new China-wide curb on ASML’s deep ultraviolet immersion lithography systems. (reuters.com) The revised bill also bars foreign firms from selling to Chinese chipmakers including Semiconductor Manufacturing International Corporation, Yangtze Memory Technologies and ChangXin Memory Technologies for facilities already barred from using American tools. It would require licenses to service equipment in covered plants. (reuters.com) Congress is pushing in the opposite direction from parts of the Trump administration. On January 13, the Bureau of Industry and Security said it would review license applications for Nvidia H200, AMD MI325X and similar chips for China on a case-by-case basis if security conditions were met. (bis.gov) China answered the committee vote on April 25. Its commerce ministry said the United States was abusing export controls in the name of national security and said Beijing would take steps to protect Chinese companies’ interests. (reuters.com) The next step is the full House, where the MATCH Act joins a wider package of export-control bills. The fight is no longer only over which Nvidia chips can cross the border, but which tools, repairs and middlemen make those chips possible. (foreignaffairs.house.gov) (cnbc.com)