A group of US lawmakers is pushing the Trump administration to shut down what they describe as a loophole in semiconductor export controls, one that allegedly allows Chinese firms like Huawei to access advanced AI chips through intermediary manufacturers. The catch: the key agency responsible for enforcing those controls says the loophole doesn’t exist.

The alleged gap in chip export controls

The core concern centers on how Chinese technology companies are reportedly obtaining advanced semiconductors critical for artificial intelligence development. Lawmakers allege that firms like Huawei are circumventing US restrictions by routing orders through intermediary companies, including major foundries like TSMC and Samsung Electronics.

Congress members who helped shape these export rules in the first place are now saying the regulations they built aren’t being enforced with enough teeth. They want the administration to tighten the framework and ensure that intermediary channels can’t serve as convenient workarounds.

The unnamed US agency at the center of this dispute has publicly denied that any such loophole exists. In its view, the current rules are adequate and functioning as intended.

The bigger picture on tech decoupling

The global semiconductor supply chain is extraordinarily concentrated. TSMC alone manufactures the vast majority of the world’s most advanced chips. Samsung is the other major player. When US lawmakers argue that these companies are inadvertently serving as conduits for restricted technology, they’re highlighting a structural vulnerability in how export controls work in practice.

The US has been progressively tightening semiconductor export controls for years, trying to maintain a strategic advantage in AI and advanced computing. China has responded by pouring resources into domestic chip development, though it remains years behind on the most advanced manufacturing processes.