Chip Export Tracking Would Help BIS Enforcement Be More Precise, Analyst Says
The U.S. should pass the Chip Security Act, a bill that would mandate location tracking for U.S. exports of certain advanced chips (see 2506250027), because it would allow American firms to boost exports of chips without “losing visibility or control over where those chips end up,” argued Kit Conklin, a nonresident senior fellow at the Atlantic Council.
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Passing the bill would send a signal that the U.S. is “committed to winning the global AI competition not just by building the most advanced technology -- but also by ensuring that technology is deployed on terms that reflect US interests and values,” Conklin, also a vice president at the research and data analytics firm Kharon and a former U.S. national security official, wrote this month for the Atlantic Council.
Conklin said the legislation is an alternative to the “false binary often facing policymakers: either impose broad restrictions that hinder legitimate commerce or tolerate unchecked smuggling that threatens national security.” He said it would allow the government to be more precise with its enforcement by targeting the firms responsible for illegally diverting and smuggling the chips instead of penalizing compliant U.S. exporters.
He added that the Bureau of Industry and Security’s current enforcement tools have “clearly proven inadequate” and noted that the agency only has one export-control officer to cover all of Southeast Asia. The U.S. should pair the Chip Security Act with more resources for BIS, Conklin said, adding that location information must be “paired with complementary intelligence and continuous monitoring.”
The bill has received pushback from chip companies and some technology policy analysts, who said the requirement would be tricky to implement and could push foreign customers to stop trusting American-made semiconductors (see 2507170040).
To address industry's concerns, the government should form a public-private partnership with a “trusted third party” to “help resolve conflicts and build mutual trust between industry and the government,” Conklin said. He said that third party would “serve as a ‘monitor.’”
The U.S. should also consider monitoring which foreign companies access advanced chips through the cloud, he said. “US supply chain security could be further strengthened if the executive branch requires the BIS to monitor which foreign companies access the cloud and compute capabilities associated with geotagged chips through screening and end-use checks,” Conklin said. “This policy would buttress the [Chip Security Act] and enable the BIS to finally field a cost-effective, scalable export control enforcement regime for AI that is not cumbersome for industry.”