US Panel Advances Chip Security Act to Block AI Semiconductor Smuggling to China

According to the SCCCP release, the proposed Chip Security Act, introduced last year, comes in response to bipartisan concerns raised by the committee in its report on DeepSeek. The report concluded that the company had used advanced chips produced by Nvidia, which are restricted from export to the People's Republic of China, to develop its artificial intelligence model.

As cited in the release, SCCCP Chairman John Moolenaar stated that the United States must safeguard its leadership in semiconductor technology, alleging that China is actively attempting to bypass export controls and illegally acquire American chips. He said the legislation would strengthen protections for US industry, secure jobs, and limit adversaries' access to critical computing power. He also noted that the bill aligns with former President Donald Trump's AI Action Plan by introducing measures such as location verification.

The SCCCP release outlined key provisions of the proposed legislation. These include requiring the US Department of Commerce to implement location verification mechanisms to ensure that advanced AI chips are not diverted to unauthorised regions, particularly those linked to military aggression or threats to the US economy and personnel.

The bill would also mandate reporting requirements for chip manufacturers, compelling them to share credible information regarding potential diversion of sensitive technology to restricted actors. Additionally, it directs the Commerce Department to study further safeguards to prevent misuse, theft, or unauthorised transfer of US semiconductor technology.

The release emphasised that the legislation directly addresses concerns raised by the SCCCP and aims to prevent the Chinese Communist Party from accelerating its AI capabilities using American technology.

Highlighting enforcement actions, the SCCCP noted that earlier this month, the US Department of Justice filed charges against three individuals accused of conspiring to violate US national security laws by smuggling billions of dollars' worth of advanced AI chips to China.

On the charges, Moolenaar said the actions by the Justice Department, the Federal Bureau of Investigation, and the administration marked a significant step in protecting America's technological edge. He described chip smuggling as a major national security threat and stressed that China's AI capabilities remain heavily reliant on American technology and illicit procurement methods.

The SCCCP release also referenced a similar case from November 2025, when the Justice Department indicted three Chinese nationals for allegedly smuggling high-tech chips to China via third-party countries such as Thailand and Malaysia.

Moolenaar, as cited in the release, stated that China continues to violate US export controls and underscored the urgency of passing the Chip Security Act. He added that the legislation would help secure cutting-edge American technology and prevent its diversion to adversaries through stricter monitoring and verification mechanisms.

- ANI