Jensen Huang Scandal Reignites Push to Tighten U.S. Semiconductor Export Controls

U.S. Lawmakers from Both Parties Push Three Bills to Tighten Semiconductor Controls on China
Trump Defends Jensen Huang, Clashing with His Hard-Line China Stance
Equipment Shipments to Samsung and SK hynix Factories in China Also at Risk

Nvidia CEO Jensen Huang is facing the possibility of being ousted over an affair scandal, with the fallout also intensifying over U.S. semiconductor policy toward China. The scandal has renewed momentum in the United States for efforts to tighten export controls on advanced semiconductors to China. Meanwhile, as U.S. President Donald Trump has strongly defended Huang, differences between the administration and Congress over semiconductor policy toward China are also coming into sharper focus. 

On Nov. 11 local time, The Wall Street Journal (WSJ) reported that key lawmakers from both parties in Congress are seeking to include three bills tightening semiconductor export controls 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 adversaries such as China. It would require the administration to notify Congress before approving semiconductor exports and grant Congress the authority to block them.

The Chip Security Act would require the introduction of security measures to track the location of semiconductors, aiming to prevent advanced U.S.-made chips from being illegally diverted to China and other destinations via third countries.

The MATCH Act would pressure allies such as Japan to bring their export controls on semiconductor manufacturing equipment to China up to the U.S. level. If an ally fails to make progress toward tightening its controls in line with the United States within 150 days, the United States could apply its export controls to that country's semiconductor manufacturing equipment that uses U.S. technology or components.

The bills have been under discussion in Congress since early this year, but lost momentum after the Trump administration allowed U.S. technology companies such as Nvidia to export semiconductors to China. However, the WSJ reported that the scandal involving Huang and the Democratic Party's capture of majorities in both the House and Senate in the recent midterm elections have given fresh impetus to efforts to tighten regulations.

Trump's China Policy Dilemma

U.S. President Donald Trump. The White House.

Congressional efforts to tighten semiconductor export controls are clashing with President Trump's China policy. Trump has approved Nvidia's semiconductor exports to China even as he has characterized China's pursuit of advanced technology as a national security threat, and he is also strongly defending Huang amid the current scandal. The Washington Post (WP) reported that these contradictory positions reveal an inherent inconsistency in the Trump administration's China policy.

In particular, Trump reportedly maintained a close relationship with Huang even after receiving intelligence reports that Huang's private life could be linked to Chinese espionage activities.

According to the WP, Trump was briefed on the matter in late fall last year and again aboard Air Force One while traveling to China in May this year. Trump, however, denied reports that he knew about the allegations at the time.

On Nov. 9 at the White House, when asked when he had first been briefed on the allegations that Huang had an affair, Trump avoided giving a specific answer, saying, "It didn't have a big impact on me." He also said he believed Huang, explaining that Huang had said he did not know the woman he was involved with was suspected of being a spy.

Impact on Korean Companies in Focus... Equipment Shipments to Chinese Factories a Key Variable

The MATCH Act, which would tighten allies' export controls on semiconductor manufacturing equipment to China, could also affect Korean semiconductor companies with production facilities in China. This is because the United States' demand that allies adopt export controls at the U.S. level could further restrict equipment shipments to Samsung Electronics and SK hynix factories in China, as well as upgrades to their facilities.

Samsung Electronics produces NAND flash memory in Xi'an, China, while SK hynix produces DRAM in Wuxi and NAND flash memory in Dalian. On the other hand, if Chinese semiconductor companies find it more difficult to obtain advanced equipment, Korean companies could benefit in terms of competitiveness.

However, it is uncertain whether the regulatory bills will ultimately pass, as congressional negotiations over the NDAA are deadlocked. Concerns have also been raised in the U.S. semiconductor industry that tighter export controls could weaken the competitiveness of U.S. companies and instead help Chinese rivals expand their market share.

This content was produced with the assistance of AI translation services.