US Senators Urge Stricter Rules on TSMC and Other Foundries to Prevent China from Obtaining AI Tech via Circumvention

(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.