US Senators Urge Stricter Rules on TSMC and Other Foundries to Prevent China from Obtaining AI Tech via Circumvention
Two bipartisan US senators sent a letter to the Trump administration, urging stricter regulations on semiconductor foundries like TSMC to prevent Chinese companies from acquiring advanced AI chips through their overseas subsidiaries. This move aims to close loopholes in US export controls and protect national security and industrial competitiveness.
📋 Article Processing Timeline
- 📰 Published: June 9, 2026 at 14:41
- 🔍 Collected: June 9, 2026 at 14:58 (17 min after Published)
- 🤖 AI Analyzed: June 9, 2026 at 14:58 (0 min after Collected)
(Central News Agency, Washington, 8th, Combined Foreign Reports) Two US senators from the Republican and Democratic parties sent a letter to the Trump administration today, urging stricter regulations on wafer foundries such as TSMC to prevent them from producing advanced AI chips for the overseas subsidiaries of Chinese companies.
The Trump administration just took action last week, explicitly requiring US companies like Nvidia to obtain an export license before selling advanced AI chips to overseas subsidiaries of Chinese companies.
The Bureau of Industry and Security (BIS), which oversees export controls at the US Department of Commerce, has stated that US companies must apply for an export license when selling chips to overseas subsidiaries of Chinese companies, including those located in third countries like Malaysia.
However, experts including former State Department official Chris McGuire pointed out last week that a loophole still exists, as Chinese companies could set up shell companies to commission foundries like TSMC to produce customized chips.
Republican Senator Jim Banks and Democratic Senator Andy Kim sent a letter today to BIS Director Jeffrey Kessler, urging him to address the issue of Chinese subsidiaries ordering customized chips from foundries.
"If this loophole continues to exist, all of America's measures to restrict China's access to advanced computing power will be significantly undermined," the two senators wrote in the letter. "As long as China places orders through some foundries to circumvent US export controls, US national security and industrial competitiveness will not be substantially protected."
As of now, neither the BIS nor TSMC have immediately responded to Reuters' requests for comment.
The Trump administration just took action last week, explicitly requiring US companies like Nvidia to obtain an export license before selling advanced AI chips to overseas subsidiaries of Chinese companies.
The Bureau of Industry and Security (BIS), which oversees export controls at the US Department of Commerce, has stated that US companies must apply for an export license when selling chips to overseas subsidiaries of Chinese companies, including those located in third countries like Malaysia.
However, experts including former State Department official Chris McGuire pointed out last week that a loophole still exists, as Chinese companies could set up shell companies to commission foundries like TSMC to produce customized chips.
Republican Senator Jim Banks and Democratic Senator Andy Kim sent a letter today to BIS Director Jeffrey Kessler, urging him to address the issue of Chinese subsidiaries ordering customized chips from foundries.
"If this loophole continues to exist, all of America's measures to restrict China's access to advanced computing power will be significantly undermined," the two senators wrote in the letter. "As long as China places orders through some foundries to circumvent US export controls, US national security and industrial competitiveness will not be substantially protected."
As of now, neither the BIS nor TSMC have immediately responded to Reuters' requests for comment.
FAQ
Who are the US senators and what are they demanding in this news?
Senators Jim Banks (R) and Andy Kim (D) sent a letter to BIS Director Jeffrey Kessler, urging stricter regulations on foundries like TSMC.
What loophole in current export controls is being pointed out?
Chinese companies can circumvent regulations by setting up overseas subsidiaries or shell companies to commission custom AI chips from foundries like TSMC.
Why is this issue important for US national security?
If China acquires advanced AI chips, it increases risks of military applications and threatens US technological superiority.