tracking chips: new bill aims to block ccp tech access

2025-05-10 general

Washington, D.C., Saturday, 10 May 2025.
a new bill, the chip security act, has been proposed by us lawmakers. it focuses on advanced semiconductors and preventing their acquisition by the chinese communist party (ccp). senator tom cotton introduced the bill, which mandates location verification for exported chips. the department of commerce would establish a mechanism to track advanced chips, ensuring they do not fall into the wrong hands. exporters would need to report any diversions or tampering. this initiative enhances export controls on critical semiconductor technology, addressing concerns about ccp access. a similar bill is expected from representative bill foster.

cotton’s chip security act

senator cotton emphasized the importance of securing america’s technological edge [1][3]. he stated that the chip security act aims to prevent advanced american chips from falling into the hands of adversaries like communist china [1]. cotton believes these enhanced security measures will allow the us to expand access to american technology without compromising national security [1]. the proposed legislation reflects ongoing efforts to refine export controls and maintain a competitive advantage in the global market [3].

location verification mechanism

the chip security act requires the commerce department to establish a location verification mechanism for advanced chips under export control [1][3]. this mechanism aims to track the location of ai chips and products containing them [3]. within six months of the act’s enactment, the commerce secretary must implement this system [1]. exporters are obligated to report any instances where products are diverted or tampered with to the bureau of industry and security (bis) [1][3].

impact on chipmakers

the trump administration is considering replacing the ai diffusion rule with simpler, stronger regulations [6]. the bis criticized the biden-era ai rule as overly complex and bureaucratic, potentially stifling american innovation [6][8]. nvidia has voiced concerns about export restrictions, with ceo huang stating that the company should be able to sell chips to china, which he estimates will be a $50 billion market in the coming years [7]. nvidia previously faced a $5.5 billion charge due to export restrictions [8].

market reactions and analysis

news of potential changes to ai chip export rules has already impacted the market [7]. when reports surfaced that the trump administration might revoke the ai diffusion rule, nvidia’s stock immediately rose by 3.1%, and the philadelphia semiconductor index increased by 1.7% [7]. this suggests that investors are sensitive to shifts in export policy and anticipate that easing restrictions could benefit chipmakers [7]. liu liya, vice president of shanghai university of finance and economics, noted that structural monetary policy positively impacts listed companies [5].

broader implications for capital markets

wu xiaqiu, director of renmin university of china’s national institute of finance, emphasized the central role of capital markets in modern finance [5]. he highlighted the importance of improving the competitiveness of listed companies, particularly in technology, ensuring ample liquidity, and promoting capital market reform [5]. these factors are crucial for fostering a robust and dynamic market environment [5]. increased trading volume on the shanghai and shenzhen stock exchanges indicates growing market activity [5].

Bronnen

chip security export control