TLDRs;
- U.S. lawmakers urge stronger export bans on advanced chipmaking tools to China after $38B in purchases.
- Bipartisan investigation reveals gaps in allied export rules exploited by Chinese firms in 2024.
- Lawmakers call for tighter coordination between the U.S., Japan, and the Netherlands.
- Security concerns rise as Chinese chipmakers grow more self-sufficient amid global tech rivalry.
A bipartisan group of U.S. lawmakers is calling for stricter controls on China’s access to advanced semiconductor manufacturing equipment after an investigation revealed that Chinese companies purchased nearly $38 billion worth of chipmaking tools in 2024.
The findings, released by the House Select Committee on the Chinese Communist Party, suggest that inconsistencies between U.S. and allied export policies have enabled Chinese firms to sidestep restrictions meant to slow Beijing’s technological progress.
The report found that despite years of sanctions targeting China’s semiconductor ambitions, non-U.S. companies in allied nations like Japan and the Netherlands continued to supply key equipment to Chinese foundries. These sales, lawmakers warned, have bolstered China’s chip manufacturing capabilities, undermining Washington’s national security strategy and eroding the effectiveness of export control regimes.
Allied Gaps Undermine U.S. Restrictions
While Washington, Tokyo, and The Hague all share concerns about China’s growing influence in high-tech manufacturing, their export rules differ in scope and enforcement.
This has created loopholes that allow companies like ASML and Tokyo Electron to sell certain tools to Chinese clients, even when U.S. firms such as Lam Research and Applied Materials cannot.
The committee report indicated that Chinese companies accounted for 39% of combined sales from the five largest chip equipment suppliers namely, Applied Materials, Lam Research, KLA, ASML, and Tokyo Electron in 2024. That marks a 66% jump from 2022, when the first wave of restrictions took effect.
“These are the sales that made China increasingly competitive in the manufacture of a wide range of semiconductors,” the report stated, warning that the trend has “profound implications for human rights and democratic values around the world.”
Security and Strategic Stakes
U.S. officials have long viewed the semiconductor supply chain as a critical battleground in the struggle for technological dominance.
Advanced chips power everything from artificial intelligence models to next-generation defense systems, and Washington fears that China’s growing autonomy in chipmaking could strengthen its military capabilities and surveillance infrastructure.
“China is attempting to rewrite the entire supply chain,” said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies. “What used to be niche tool segments are now battlegrounds.”
Three Chinese firms, SwaySure Technology Co, Shenzhen Pengxinxu Technology Co, and SiEn (Qingdao) Integrated Circuits Co, were singled out as particular threats in the committee’s findings. The companies were previously barred from receiving U.S. exports in December 2024 due to alleged ties to Huawei Technologies and other entities involved in circumventing trade restrictions.
Industry Response and Path Forward
Industry leaders have acknowledged the growing pressure from regulators but are seeking clearer, more coordinated policies among Western allies. Mark Dougherty, president of Tokyo Electron’s U.S. division, noted that the company’s sales to China have already started to decline in 2025 as new export controls take hold.
“I think it’s clear, from a U.S. perspective, there’s an outcome that is still desired that has not yet been achieved,” Dougherty told Reuters, emphasizing the need for alignment between the U.S. and Japan.
The committee’s report urged the Biden administration to strengthen coordination with allies, expand export bans to cover tool components, and close gaps that allow Chinese firms to continue acquiring critical manufacturing technologies.
