TL;DR
China’s Commerce Ministry warned that U.S. chip export legislation would “seriously disrupt” global semiconductor supply chains, in response to the House Foreign Affairs Committee’s April 22 surge on more than 20 export control bills, the largest in congressional history. The centerpiece is the MATCH Act, which would require the Netherlands and Japan to align DUV lithography export restrictions with U.S. standards within 150 days or face unilateral enforcement, cutting off ASML’s remaining sales in China and banning maintenance of existing machines. China has already enacted comprehensive supply chain security regulations and rare earth restrictions, while the United States is simultaneously building domestic capacity through investments from the CHIPS Act and the $25 billion Terafab project.
China’s Ministry of Commerce warned Friday that US legislation advancing in Congress would “seriously disrupt the international economic and trade order and seriously undermine the stability of the global semiconductor industry and supply chain.” The legislation in question is the MATCH Act, the Multilateral Alignment of Technology Controls on Hardware, which passed the House Foreign Affairs Committee on April 22 as part of what lawmakers described as the largest sweep on semiconductor export controls in congressional history. The bill would require the Netherlands and Japan to align their export restrictions on chip equipment with U.S. rules within 150 days or face unilateral enforcement by the U.S., including an expanded foreign direct goods rule that would give Washington jurisdiction over equipment containing any U.S. technology, regardless of where it was made. If enacted, the MATCH Act would cut off China’s access to the DUV immersion lithography machines that ASML still sells there and prohibit maintenance on machines already installed, a move that would affect all advanced and near-advanced factories in the country.
dialing
The House Foreign Affairs Committee introduced more than 20 export control bills on April 22, chaired by Rep. Brian Mast. The MATCH Act, introduced by Rep. Michael Baumgartner on April 2, has bipartisan support in both chambers. Senators Jim Risch, Pete Ricketts, Andy Kim and Chuck Schumer presented to the Senate on April 8. The bill names SMIC, Huawei, Hua Hong, CXMT and YMTC as “covered facilities,” including all subsidiaries and affiliates, and would prohibit the export of DUV immersion lithography equipment to any of them. It would also prohibit allied companies from providing engineering services to maintain or upgrade machines already operating in Chinese factories, a service restriction that would degrade existing capacity over time as the machines require regular maintenance to maintain performance.
The committee also advanced the Chip Security Act, which would require advanced chips to include pre-export location verification mechanisms so exporters can notify the government if a chip arrives at an unauthorized destination. The Semiconductor Industry Association opposes this provision and warns of “untested and potentially unfeasible on-chip mechanisms” that could undermine global confidence in American semiconductors. The ECRA Penalty Enhancement Act would quadruple civil penalties for export violations, raising the limit per violation from $300,000 to $1.2 million. The ECRA Statute of Limitations Extension Act would double the processing period from five to ten years. The Deterring the Theft of U.S. AI Models Act would authorize sanctions on Chinese AI companies accused of misusing U.S.-developed models. Smuggling $2.5 billion worth of Nvidia servers into Chinaas Super Micro Computer’s co-founder allegedly did via a diversion scheme routed through Southeast Asia, demonstrates both the scale of demand for restricted chips and the limits of an enforcement regime that relies on declared end-use and corporate compliance teams.
The climb
The MATCH Act would be the most significant escalation in U.S. semiconductor export controls since the initial restrictions imposed in October 2022. Those rules prohibited the export of advanced computer chips and chip-making equipment to China. They were updated in October 2023 to close loopholes, expanded in December 2024 to cover high-bandwidth memory and additional equipment, and supplemented in January 2026 when the Trump administration imposed a 25% Section 232 tariff on imports of advanced semiconductors and changed the export review policy for Nvidia’s H200 and AMD’s MI325X from a presumption. refusal to evaluate on a case-by-case basis. Blackwell class chips remain under presumption of denial. The January 2026 changes were partly a response to pressure from Nvidia, whose CEO Jensen Huang dined with Trump at Mar-a-Lago and argued that overly restrictive controls would push Chinese AI labs toward domestic alternatives. DeepSeek optimizes AI models for Huawei chips instead of Nvidia hardware is, in Huang’s words, “a horrible result”for the United States, because it would break the software dependence on Nvidia’s CUDA ecosystem that currently gives US chips their blocking advantage.
The MATCH Act is moving in the opposite direction of January’s easing. While the executive branch loosened restrictions on finished chips, Congress is tightening restrictions on the equipment used to make them. The logic is that controlling equipment is more effective than controlling chips because a lithography machine is a $200 million tool that requires years of service from the manufacturer, while a chip is a commodity that can be diverted through middlemen. ASML, the sole manufacturer of the most advanced EUV and DUV immersion lithography systems, has seen its shares fall since the introduction of the bill. China accounted for 33% of ASML’s revenue in 2025. The company expects that share to fall to about 20% in 2026, even without the MATCH Act. If the bill passes, the drop would be much steeper. Applied Materials projects between $600 million and $710 million in lost revenue in China for fiscal 2026. Lam Research reported that China still accounted for 43% of its first-quarter fiscal 2026 revenue, $2.28 billion, but expects that share to fall below 30% this year.
the answer
China’s countermeasures are already extensive. Beijing imposed export bans on gallium, germanium and antimony in December 2024, suspended them in November 2025 for one year, but maintained licensing requirements. It restricted export agencies, including MOFCOM and the Ministry of Industry and Information Technology, that authorize legal action against companies deemed to be damaging China’s supply chains. China has ordered domestic chipmakers to purchase 50% of their equipment from Chinese suppliers, a requirement that threatens an estimated $18 billion in annual equipment sales in the United States. MOFCOM’s statement on Friday said China would “resolutely take necessary measures to firmly safeguard the legitimate and legal rights and interests of Chinese enterprises.” No new specific retaliatory measures were announced, but the regulatory architecture for them already exists.
The supply chain implications extend far beyond the two main combatants. Japan, whose Tokyo Electron, Nikon, Canon, Screen Holdings and Advantest sell equipment to Chinese factories, already implemented controls on 23 types of equipment in July 2023. The MATCH Act would require Japan to extend those restrictions within 150 days or lose access to American technology in its own supply chain. The Netherlands faces the same deadline. South Korean memory giants SK Hynix and Samsung operate factories in China that rely on servicing equipment from companies that the MATCH Act would restrict. The EU’s €700 million investment in its NanoIC semiconductor pilot line The imec meeting in Leuven, backed by ASML and national governments, reflects Europe’s assessment that the chip supply chain is fragmenting and that building domestic capacity is no longer optional.
the race
China’s semiconductor industry has made genuine progress under pressure. SMIC is producing 7-nanometer chips for Huawei’s Kirin processors and is working to double 7nm capacity by 2026. It has started pilot testing at 5nm, aiming for mass production for Huawei and Alibaba, although improving performance remains the critical challenge. CXMT is mass producing DDR5 and LPDDR5 memory and is targeting HBM3 production, although the schedule has been delayed and mass production within 2026 now appears unlikely. YMTC is expanding NAND flash production and developing HBM packaging technologies. Huawei is reportedly preparing to submit a 3nm chip design using carbon nanotubes and 2D materials to SMIC, an unconventional approach that has not been independently confirmed with technical details. China’s semiconductor self-sufficiency rate was about 33% in 2024 and is estimated to be about 50% in 2025. The new target, included in the 15th Five-Year Plan, is 80% by 2030, with priorities including a fully domestic 7nm equipment pipeline and stable 14nm production. Tom’s Hardware assessed that China remains “still a decade behind, despite hundreds of billions spent and significant progress.”
The United States is pursuing the reverse strategy: restricting China’s access to equipment while developing domestic manufacturing capacity on an unprecedented scale. The US government’s $36 billion stake in Intel under the CHIPS ActConverted from grants to capital, it finances fabulous buildings in Ohio and Arizona. Intel’s foundry partnership with Musk’s $25 billion Terafab chip megaproject adds another advanced manufacturing facility. TSMC is building factories in Arizona. Samsung is expanding in Texas. The theory is that export controls buy time for domestic capabilities to come online, at which point the United States can supply its own and its allies’ advanced chips without relying on a supply chain that passes through a geopolitical adversary. The problem is that the timeline for factory construction is measured in years, the timeline for congressional legislation is measured in months, and the timeline for retaliatory export restrictions on rare earths and critical minerals is measured in days. China’s warning on Friday was not that the MATCH Act would fail to restrict its chip industry. The point was that the disruption would not be limited to China. When both sides of a supply chain use restriction as a weapon, the chain does not hold up. It fragments and everyone pays the cost of rebuilding the separated ones.
