House Select Committee Advocates for Stronger Restrictions on Chip Toolmakers

House Select Committee Advocates for Stronger Restrictions on Chip Toolmakers

The House Select Committee on China is advocating for stronger restrictions on companies producing the equipment used to make semiconductor chips. This movement stems from concerns that their sales are enhancing Beijing's chipmaking capabilities.

In a new report released Tuesday, the panel disclosed that Chinese firms invested $38 billion in semiconductor manufacturing equipment from five major companies based in the U.S. and allied nations last year. This expenditure represented an overwhelming 39 percent of their aggregate revenue.

Key Findings and Recommendations

• Committee Chair John Moolenaar (R-Mich.) emphasized that these profits come at the cost of U.S. national security.
• The report called for dramatic expansions of countrywide bans and licensing requirements on chipmaking tools.
• Lawmakers noted the need for greater alignment between the U.S. and its allies regarding export controls.
• They argued that foreign toolmakers are operating with less restriction than U.S. companies.

Future Considerations

If deemed necessary, the report proposed that the U.S. broaden its use of the foreign direct product rule to obstruct sales in allied nations. Such actions would counter China’s attempts to modernize its military and address human rights violations linked to its governance.

Amidst debates surrounding artificial intelligence (AI) competition with China, chips have emerged as a pivotal topic. Concerns linger about the previous approval for companies like Nvidia and AMD to resume sales of advanced chips to China, which has drawn criticism across the political spectrum.