In a new report Tuesday, the panel said Chinese firms spent $38 billion on semiconductor manufacturing equipment from five major companies based in the U.S. and allied countries — ASML, Tokyo Electron, Applied Materials, KLA and Lam Research — last year.
This amounted to 39 percent of their aggregate revenue, the report noted.
“They are growing their profits at the expense of U.S. national security,” House China Committee Chair John Moolenaar (R-Mich.) said in a statement. “We must not allow this critical equipment to be handed over to our foremost adversary, or America could lose the technology arms race.”
The panel’s report called for “dramatically” expanding country-wide bans and licensing requirements on the chipmaking tools, suggesting that entity-based export controls have fallen short.
The lawmakers also argued for greater alignment between the U.S. and its allies on export controls. The report found that non-U.S. toolmakers, like ASML and Tokyo Electron, were less constrained than their American peers.
If necessary, the report suggested the U.S. expand its use of the foreign direct product rule, which extends export controls to certain foreign-made products that rely on U.S. technology, to block sales in allied countries.
“It makes little sense to sell the [Chinese Communist Party] the chips they need to modernize their military and violate human rights,” Rep. Raja Krishnamoorthi (D-Ill.), ranking member on the committee, said in a statement.
“But it makes even less sense to sell them the machines and tools they need to produce those chips themselves,” he continued.
The report comes amid debate in Washington over the best way to outcompete China on artificial intelligence (AI), with chips at the center of this conversation.
The Trump administration faced backlash from both sides of the aisle this summer, when it allowed Nvidia and AMD to resume sales of some advanced chips to China. In turn, the chipmakers agreed to turn over 15 percent of their revenue from these sales to the U.S. government.
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