Key Points:
- U.S. lawmakers scaled back a controversial bill that restricts the sale of advanced chipmaking equipment to China.
- The revised MATCH Act still blocks foreign companies like ASML from selling specific machines to Chinese tech firms.
- The original draft panicked the technology industry because broad restrictions threatened global equipment sales and exports.
- Chinese officials strongly oppose the legislation and accuse the United States of weaponizing national security to block technological progress.
U.S. lawmakers scaled back a major piece of legislation designed to block China from buying advanced chipmaking equipment. The latest version of the bill removes some of the harshest rules that panicked the technology industry. However, the legislation still includes a strict new nationwide restriction targeting deep-ultraviolet immersion lithography machines. A Netherlands-based company, ASML, completely dominates the global market for these machines. The company declined to comment on the new rules.
Republican Representative Michael Baumgartner introduced the original bill, known as the MATCH Act, in the House of Representatives on April 2. The legislation earned strong bipartisan support right away. MATCH stands for the Multilateral Alignment of Technology Controls on Hardware Act. Lawmakers wrote the bill to close existing loopholes in current export restrictions. They want to align the United States’ trade rules with those of allied nations, specifically targeting the Netherlands and Japan. The ultimate goal is to help America maintain its global leadership in artificial intelligence, a technology that could easily shift the balance of power between rival nations.
The technology industry viewed the early-April version of the bill with deep alarm. Manufacturers in the United States and abroad panicked when they read the original text. One trade expert described the first draft as a runaway train. The original bill tried to force allied nations to copy American export controls while imposing massive restrictions tied to specific companies. Equipment manufacturers quickly warned lawmakers that these heavy restrictions would severely reduce global exports and permanently damage their sales.
Listening to the loud complaints, Representative Baumgartner decided to offer a new, toned-down version of the bill as a direct substitute. Congress feels massive pressure to pass new restrictions on computer chips and manufacturing equipment right now. Lawmakers say they need to act because the Trump administration recently paused updates to existing export controls and even loosened some rules regarding advanced chips. The House Foreign Affairs Committee plans to hold an official vote on the revised bill next Wednesday. The committee will also vote on more than a dozen other bills related to artificial intelligence, semiconductors, and global export controls.
Lawmakers removed several controversial rules from the early-April draft to calm angry manufacturers. For example, they deleted strict countrywide bans on cryogenic etch tools. Companies use these specialized tools to carve microscopic patterns into silicon chips. California-based Lam Research and Japan-based Tokyo Electron manufacture most of this equipment. Both companies feared losing massive amounts of revenue under the old rules.
Despite the cuts, the more tailored bill still packs a heavy punch. The legislation strictly prohibits foreign companies from selling equipment to several major Chinese chipmakers. The banned list includes ChangXin Memory Technologies, Yangtze Memory Technologies, and Semiconductor Manufacturing International Corporation. Foreign companies cannot sell to these Chinese firms if the equipment goes to facilities that Washington has already barred from using American tools.
The revised bill also changes how companies handle maintenance. Foreign firms must now secure special government licenses just to service existing equipment inside those restricted Chinese facilities. This servicing rule sparked heavy controversy among foreign manufacturers. To reach a compromise, American lawmakers agreed that the government will no longer apply an automatic policy of denial when companies submit these specific license applications.
The United States government has tried to align its chipmaking controls with those of Dutch and Japanese officials since late 2022. While diplomats achieved some success, American equipment makers still argue that the global playing field remains unfair. To fix this, the MATCH Act imposes a strict deadline on diplomatic negotiations with allied supplier countries. Once that deadline passes, the bill directs the United States government to impose the controls unilaterally.
The targeted Chinese chipmakers ignored requests for comment regarding the upcoming vote. However, Chinese government officials made their anger clear. A spokesman for the Chinese embassy in Washington, Liu Pengyu, stated that his country will closely follow these developments to safeguard its rights and interests. He released a statement saying that China firmly opposes the United States’ overstretching of the concept of national security. He accused American lawmakers of using false pretexts to coerce other countries into joining an illegal technological blockade against China.
