Jensen Huang scandal gives fresh impetus to three U.S. bills tightening chip controls on China; Samsung and SK could face limits on equipment imports to Chinese plants

[Financial News] A push in the U.S. Congress to tighten restrictions on semiconductor exports to China is gaining momentum again amid a scandal over NVIDIA Corporation CEO Jensen Huang’s affair with a woman suspected of being a Chinese spy.
The Wall Street Journal (WSJ) reported on the 11th (local time) that key Republican and Democratic lawmakers in Congress are pushing to pass three bills strengthening controls on semiconductor exports by including them in the National Defense Authorization Act (NDAA).
The bills are the AI Overwatch Act, the Chip Security Act and the MATCH Act.
The AI Overwatch Act would give Congress oversight of exports of advanced artificial intelligence (AI) chips to China and other adversaries. It would require the administration to notify Congress before approving exports and give Congress the authority to block them.
The Chip Security Act would require the introduction of security devices that can track the location of semiconductors, with the aim of preventing advanced U.S.-made chips from being smuggled to China and other destinations via third countries.
The MATCH Act would pressure allies such as Japan to tighten controls on semiconductor manufacturing equipment exports to China to U.S. levels, in order to block the flow of advanced chipmaking equipment into China.
The three bills were introduced in the House Committee on Foreign Affairs early this year and are now also included in the Senate’s NDAA package. The NDAA is an annual bill authorizing the Defense Department’s spending and policies.


The legislation is gaining new momentum after it emerged that Huang had an affair with businesswoman Alice Huang, who is suspected of having ties to Chinese intelligence agencies.
Alice Huang, a former executive at Singapore data-center company Megaspeed International, is under investigation by U.S. authorities on suspicion of illegally diverting chips made by NVIDIA Corporation to China.
The push to tighten regulations had stalled under the Trump administration’s second term, as President Trump cultivated close ties with technology companies such as NVIDIA Corporation. But the scandal and the Democrats’ capture of both chambers of Congress in last week’s midterm elections have provided new momentum, WSJ said.
Democratic House Minority Leader Hakeem Jeffries, considered a leading candidate to become the next House speaker, previously said he would work to ensure the relevant provisions were included in the final version of the NDAA.
Republicans are also leading the push for tighter regulations, including Senators Jim Banks and Pete Ricketts, House Foreign Affairs Committee Chairman Brian Mast, and John Moolenaar, chairman of the House Select Committee on Strategic Competition between the U.S. and China.


However, the NDAA is deadlocked in Congress, and individual provisions could be revised or dropped during negotiations between the parties, leaving the bills’ ultimate passage uncertain.
Industry observers are concerned that tighter regulations could weaken U.S. companies’ competitiveness and result in them ceding market share to Chinese rivals.
The developments could also affect South Korean semiconductor companies, making them worth watching.
In particular, if the MATCH Act leads allies to tighten controls on semiconductor equipment exports to China, Samsung Electronics Co., Ltd. and SK hynix could face greater restrictions on bringing equipment into their production facilities in China and upgrading those facilities.


The MATCH Act would allow the U.S. to impose export restrictions on equipment produced by allies that uses U.S. technology or components if an ally fails to make progress within the set deadline (150 days) toward tightening controls on semiconductor manufacturing equipment exports to China in coordination with the U.S.
Samsung Electronics Co., Ltd. produces NAND flash in Xi’an, China, while SK hynix produces DRAM in Wuxi and NAND flash in Dalian.
On the other hand, if Chinese semiconductor companies find it harder to obtain advanced equipment, limiting their technology development and expansion of production capacity, South Korean companies could also benefit competitively.


[email protected] Lee Seok-woo, International Affairs Correspondent Reporter