The Chip Security Act to combat smuggling of cutting-edge technology to the People’s Republic of China has been approved by the House Foreign Affairs Committee (March 26, 2026).
According to the Select Committee on the Chinese Communist Party, the legislation would:
Require Location Verification for Advanced AI Chips. The Department of Commerce must work to ensure America’s most advanced AI chips are not diverted to unauthorized regions and end up in the hands of our adversaries—especially those fueling military aggression or targeting the U.S. economy and service members.
Enforce Mandatory Reporting. Chipmaker companies must report and share credible information about potential diversion of sensitive technology to restricted actors.
Study Additional Safeguards. Requires the Department of Commerce to study additional methods that could stop U.S. chips from being stolen, misused, or ending up in the wrong hands.
The legislation states that within 180 days of enactment, “the Secretary [of Commerce] shall require any covered integrated circuit product to be outfitted with chip security mechanisms that implement location verification, using techniques that are feasible and appropriate on such date of enactment, before it is exported, reexported, or in-country transferred to or in a foreign country.”
The export controls have proved insufficient to prevent the technology from getting to the PRC. In November 2025, the Justice Department charged three Chinese nationals “with smuggling Nvidia and HP products to China.” The scheme involved shipping chips first to countries like Thailand and Malaysia, where the chips were then sent on to China.
Even more recently, on March 19, 2026, the Justice Department announced an indictment of three Chinese nationals for arranging to send high-end servers laden with high-end artificial intelligence technology to China “in violation of U.S. expert controls.” The plotters diverted the servers to Southeast Asia before having them shipped to China, and they set up fake servers elsewhere to satisfy inspectors.
