A bipartisan pair of US senators on Monday urged US President Donald Trump’s administration to tighten rules on chip contract manufacturers such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to prevent them from making advanced artificial intelligence (AI) chips for overseas subsidiaries of Chinese companies.
This comes after the Trump administration last week moved to halt a potential loophole that might have led companies to export advanced chips such as those made by Nvidia Corp to subsidiaries of Chinese companies outside China.
The Bureau of Industry and Security (BIS), the division of the US Department of Commerce that oversees export control laws, has said that sales to Chinese company subsidiaries in third countries such as Malaysia require a license.
Photo: Reuters
Experts such as former US Department of State official Chris McGuire said last week that the guidance still did not address another potential loophole, under which front companies for Chinese firms could order custom chips to be made by chip contract manufacturers such as TSMC.
On Monday, Republican Senator Jim Banks and Democrat Senator Andy Kim sent a letter to BIS director Jeffrey Kessler asking the BIS to directly address the issue of subsidiaries of Chinese firms ordering custom chips.
“Should this gap remain unaddressed, it would substantially undermine every other restriction the United States has imposed on [China’s] access to advanced computing capability,” the senators wrote. “Export controls that can be circumvented through fabrication orders placed at the world’s most advanced foundry offer no meaningful protection to American national security or to the competitiveness of United States industry.”
