Senators Urge Tightening of Rules on Chip Contract Manufacturers

A bipartisan effort by U.S. Senators is urging the Trump administration to tighten controls on Taiwan Semiconductor Manufacturing Co and similar entities to prevent potential circumvention of restrictions by overseas subsidiaries of Chinese firms, which could access advanced AI chips from these manufacturers.

In a rare display of bipartisan unity, U.S. Senators Jim Banks and Andy Kim have called on the Trump administration to toughen its stance on chip contract manufacturers like Taiwan Semiconductor Manufacturing Co to curb Chinese companies from accessing advanced AI technology.

The call follows concerns over a potential loophole allowing firms to export advanced technology, including chips made by industry giants like Nvidia, to subsidiaries of Chinese companies outside China. The Bureau of Industry and Security recently clarified that sales in third countries, like Malaysia, necessitate a license.

However, experts remain worried about inadequate measures against front companies. Banks and Kim argue that failing to address this gap could weaken U.S. national security and globally diminish its industrial competitiveness.