On October 7, 2025, a bipartisan group of lawmakers in Washington, D.C. sounded an urgent alarm about the effectiveness of current U.S. export controls on semiconductor manufacturing equipment to China. Their message, delivered through a newly released report by the House Select Committee on the Chinese Communist Party, was blunt: existing restrictions aren’t cutting it, and the stakes for U.S. national and economic security have never been higher.
According to the committee’s findings, U.S. and allied companies sold a staggering $38 billion worth of semiconductor tools to China in 2024 alone. Most of this equipment, as The Register reported, was older gear that slipped through the cracks of current U.S. export rules or was sold to Chinese buyers not subject to regulation. The vendors, for their part, acted within the letter of the law. But for lawmakers, this technical compliance only underscored the deep flaws in the existing system.
“If we are serious about limiting Chinese semiconductor advancement, countrywide technology controls are the only way,” declared Congressman John Moolenaar, the Republican chairman of the House Select Committee on the Chinese Communist Party, at an event hosted by Georgetown University’s Center for Security and Emerging Technology. Moolenaar’s words, cited by South China Morning Post, reflected a growing sense of urgency in Washington’s approach to tech rivalry with Beijing.
The committee’s report laid out the crux of the problem: Chinese entities, even without official ties, have shown a remarkable ability to cooperate and sidestep U.S. export controls. “Entities in China do not need official corporate links to cooperate effectively with each other to evade US export controls,” the report stated, as noted by South China Morning Post. This adaptability, lawmakers warn, threatens to undermine years of U.S. efforts to slow China’s rise as a semiconductor powerhouse.
China’s ambitions are no secret. The committee described the People’s Republic of China as “fervently seeking to build a world-leading semiconductor manufacturing industry from raw materials through semiconductor manufacturing equipment to finished product.” In other words, Beijing is aiming for total self-sufficiency—and, if possible, global leadership—in a sector that underpins everything from smartphones to advanced military systems.
Yet the U.S. isn’t fighting this battle alone. Some of the world’s most sophisticated semiconductor toolmakers are based in allied countries, notably the Netherlands and Japan. These nations have, in theory, aligned themselves with Washington’s trade policies on China. But the committee’s investigation found that execution on the ground is far from consistent.
Take the case of ASML, the Dutch giant that dominates the market for advanced lithography systems. While the Netherlands has blocked the sale of extreme ultraviolet (EUV) lithography machines to Chinese buyers—a move widely hailed as a win for U.S. strategy—ASML continues to sell deep ultraviolet (DUV) systems in large quantities to China. DUV technology, though older, remains critical for producing chips down to about 7 nanometers—a level of sophistication still highly sought after by Chinese firms, according to The Register.
“If ASML or Tokyo Electron keep selling … our controls leak like a sieve. We must persuade, and if necessary, pressure partners in the Netherlands and Japan to enforce synchronised restrictions,” Moolenaar insisted, making clear that Washington expects more than lip service from its allies.
But what’s the solution? The committee wants nothing short of a dramatic expansion of export controls, not just at home but across allied nations. “Our controls must be equally enforced by our allies,” Moolenaar emphasized, according to South China Morning Post. The report recommends that if partners like the Netherlands and Japan fail to align their policies, the U.S. should invoke the Foreign Direct Product Rule (FDPR)—a powerful legal tool that extends U.S. export restrictions to foreign-made products built with American technology.
The FDPR has already proven its teeth. It’s the reason Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, does not knowingly supply Chinese tech giant Huawei with chips. TSMC’s manufacturing processes are deeply intertwined with U.S. intellectual property, so violating U.S. restrictions could lead to severe penalties. The committee’s message is clear: if allies won’t play ball voluntarily, the U.S. has ways to compel compliance.
Notably, the committee’s report doesn’t just dwell on what’s gone wrong—it also points to the risks of inaction. The continued flow of chipmaking tools, even if mostly older models, makes it easier and cheaper for China to build up its domestic industry. “The United States and our allies should ensure the CCP’s pursuit of this goal is as challenging and expensive as possible,” the report urged, as noted by The Register.
There’s a broader context here, too. The semiconductor supply chain is notoriously complex, with equipment and know-how flowing across borders in ways that often defy simple regulation. While the U.S. has succeeded in blocking sales to certain blacklisted companies—like China’s Semiconductor Manufacturing International Co. (SMIC)—the committee found that many state-backed firms not on the U.S. entities list still manage to buy what they need.
And as the technological arms race heats up, export controls have become a key factor in the development of next-generation chips, including those used in artificial intelligence. Any loophole, lawmakers warn, could have ripple effects throughout the global tech ecosystem, raising the stakes for both economic competitiveness and national security.
The committee’s recommendations are sweeping. They call for a more comprehensive ban on the sale of all semiconductor manufacturing gear to Chinese interests, not just the most advanced tools. They also urge the U.S. to “pressure partners in the Netherlands and Japan to enforce synchronised restrictions,” and to apply the FDPR if necessary, ensuring that even foreign-made equipment based on U.S. technology falls under American control.
In a sharply worded conclusion, the investigators wrote, “It is far past time that the toolmakers start treating the CCP and its national champions as threats to their corporate longevity, rather than as valued customers.” The message is unmistakable: business as usual is no longer an option.
As the world watches the U.S. and China battle for semiconductor supremacy, the path forward remains fraught with uncertainty. But one thing is clear—Washington’s patience with half-measures is wearing thin, and the call for stronger, more unified export controls is only growing louder.
