U.S. Congress fast-tracks three bills to tighten semiconductor controls amid Jensen Huang controversy

【Financial News, New York — Correspondent Lee Byung-chul】 Jensen Huang, CEO of NVIDIA, is facing allegations of an extramarital relationship with a person suspected of being a Chinese spy, fueling calls in the United States for tougher semiconductor controls on China. As calls for Huang’s resignation and moves to compel him to testify gain traction in Congress, three bills covering everything from exports of advanced artificial intelligence (AI) chips to preventing illicit diversion and controlling manufacturing equipment are gaining legislative momentum. If the restrictions take effect, they are expected to affect not only Samsung Electronics and SK hynix’s operations at their plants in China but also the high-bandwidth memory (HBM) supply chain.
According to CNBC and The Wall Street Journal (WSJ) on the 11th (local time), calls for Jensen Huang, CEO of NVIDIA, to resign are spreading across party lines in Congress. Republican Senator Kevin Cramer urged Huang to step down, saying that his extramarital relationship with a person suspected of being a Chinese spy had left him “vulnerable to blackmail or coercion.”
Democratic Representative Suhas Subramanyam and Republican Representative Don Bacon also joined the calls for Huang to resign. The House Foreign Affairs Committee, the House Select Committee on China, and the House Intelligence Committee have asked Huang to appear on the 18th and are considering compelling him to testify if he does not comply. Huang acknowledged the extramarital relationship on the 8th, and NVIDIA’s board has launched an independent investigation. However, no links to Chinese intelligence agencies or involvement in the illicit diversion of semiconductors have been confirmed.

The controversy surrounding Huang is also affecting Congress’s push to legislate tougher semiconductor controls on China. Congress is seeking to include three bills—the AI OVERWATCH Act, the Chip Security Act, and the MATCH Act—in the fiscal 2027 National Defense Authorization Act (NDAA).
The bills focus on blocking routes through which China could obtain advanced U.S. AI semiconductors and manufacturing technology. Each has advanced through the House Foreign Affairs Committee, and they are also included in the Senate’s NDAA negotiating package. The AI OVERWATCH Act would strengthen congressional oversight of the U.S. administration’s export licenses for advanced AI semiconductors. Its key provision would allow Congress to review licenses when the U.S. Department of Commerce authorizes exports of advanced AI chips to countries of concern, including China, and to block them under certain conditions. Given that Huang has long argued for easing restrictions on AI chip exports to China, the bill could have a direct impact on NVIDIA.
The Chip Security Act is designed to prevent U.S.-made advanced AI semiconductors from being diverted to China through third countries. It would introduce technology to locate semiconductors and track where they are actually used even after export. The need for the bill has come into focus amid allegations of indirect shipments through data centers in Southeast Asia and elsewhere.
The MATCH Act would tighten export controls on semiconductor manufacturing equipment. Its key provision would call on major semiconductor equipment-producing countries, including the Netherlands and Japan as well as the United States, to strengthen export restrictions on China. Foreign-made equipment incorporating U.S. technology could also be subject to restrictions on exports to China.
Democratic Senator Elizabeth Warren and Republican Senator Jim Banks issued a joint statement shortly after Huang’s extramarital relationship became public, calling for the swift passage of the AI OVERWATCH Act.

Tighter U.S. semiconductor controls on China are emerging as a new factor for Samsung Electronics and SK hynix. In particular, if the MATCH Act, which restricts exports of semiconductor manufacturing equipment, passes, it could increase the burden of upgrading to advanced processes and investing in equipment at their production facilities in China.
Samsung Electronics produces NAND flash memory in Xi’an, while SK hynix operates a DRAM plant in Wuxi and a NAND flash plant in Dalian. If the United States extends equipment export controls to allies such as the Netherlands and Japan, it may become even harder for these plants to obtain advanced equipment.
Reuters reported on the 21st of last month that Samsung Electronics and SK hynix were pursuing process upgrades at their China plants despite U.S. export controls. According to sources, Samsung Electronics’ Xi’an plant is transitioning its NAND flash production from around 200 layers to 286 layers. Reuters, however, reported on the 3rd of this month that U.S. authorities were withholding export licenses for U.S.-made equipment needed to expand SK hynix’s Dalian plant. The issue is also reportedly affecting SK hynix’s plans to invest in a new memory plant in New York.
The actual impact of the restrictions, however, is expected to depend on the scope of the final legislation. The Information, a U.S. technology publication, reported on the 11th (local time) that the White House had proposed to Congress narrowing the MATCH Act’s scope to advanced semiconductor manufacturing technology. The move is seen as an effort to ease the regulatory burden on existing production facilities.
On the other hand, tougher restrictions on Chinese semiconductor companies could benefit South Korean companies. If Chinese firms such as ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC) struggle to obtain advanced manufacturing equipment, that could help Samsung Electronics and SK hynix maintain their technological edge.
The impact on the HBM market is also drawing attention. Tighter U.S. controls on AI chip exports to China could weaken NVIDIA’s business there and affect demand for related memory products. However, as investment in AI data centers expands in the United States, Europe, and elsewhere, the effect on South Korean companies’ overall HBM demand may be limited.

[email protected] Correspondent Lee Byung-chul Reporter