News like “the US tightens AI chip exports to China” comes up every so often. But who decides which chip can be sold where, and with what tools?
This piece covers only the mechanism, not right or wrong. First, what export controls are. Then the three key tools. Finally, how things changed from 2022 to 2026.
What Are Export Controls?
Export controls use regulation to restrict the export of specific goods, software, or technology to specific recipients. In semiconductors, the main actor is the Bureau of Industry and Security (BIS) under the US Commerce Department. It works under the Export Administration Regulations (EAR).
BIS covers advanced AI chips, manufacturing equipment, and related software and technology. Put simply, it decides “what can be exported, to whom, and whether a license is needed first.”
The Three Key Tools
The Entity List: a list of companies or institutions named by BIS. To sell controlled US products or technology to anyone on the list, you must apply for a license first, and review is often under a “presumption of denial” (default no). As of October 2026, the last additions to the list were made in October 2025. A broader rule that would also cover affiliates owned 50% or more by listed companies is suspended until November 9, 2026.
The Foreign Direct Product Rule (FDPR): a foreign-made product can also fall under US control if it is the direct product of certain US technology or software, or of equipment made with that technology. This lets the US reach chips that are not made in the US.
Case-by-case license review: BIS reviews each application individually. It may approve, approve with conditions, or reject. It is not the same as a green light.
2022 to 2026: How the Controls Changed
| Timing | Event | Nature |
|---|---|---|
| 2022-10 | Controls on advanced computing chips and semiconductor equipment to China take effect (e.g. a process threshold for logic at 16/14nm and below) | BIS rule |
| 2023-10 | Expanded to cover more AI chips and equipment; advance-notification mechanism added | BIS rule |
| 2024-12 | 24 new equipment categories, HBM brought under control, 140 entities added to the list | BIS rule |
| 2025-05 | Announced it will not enforce the “AI diffusion rule” that ranked countries into tiers (the text stays in the regulations) | BIS announcement / GAO |
| 2026-01 | Mid-tier chips such as the H200 moved from presumption of denial to case-by-case review for China | BIS rule |
| 2026-03 | Draft replacement for the AI diffusion rule withdrawn; in July, a BIS Under Secretary said there is no plan for another replacement | Reuters report |
| 2026-05 | Overseas units of companies headquartered in China and other controlled countries also need licenses to buy advanced chips | BIS guidance |
| 2026-07 | UAE moved to A:5; government and approved companies can get advanced computing chips without a license | BIS rule |
From 2022 to 2025, controls on China kept tightening. In 2026, loosening and tightening happen side by side: a narrow door opened for the H200 and rules for the UAE got looser, while the US reaffirmed that the overseas units of Chinese companies also need licenses.
2026: The H200 Moves to Case-by-Case Review
Since January 15, 2026, exports of some mid-tier AI chips to China (such as the NVIDIA H200 and AMD MI325X) moved from “presumption of denial” to case-by-case review under strict conditions. The exporter must show that domestic US supply is sufficient, that foundry capacity for US customers is not crowded out, that cumulative total performance of the same chip shipped to China and Macau is no more than 50% of what is shipped for use inside the US, and that customers pass security screening. The chips must also go through third-party testing in the US first.
When the chips enter the US for testing, they face a 25% tariff under Section 232. Actual shipments are small: NVIDIA said that in the quarter ending July 2026, H200 shipments to China were less than 1% of its data center revenue. According to Reuters, citing the Financial Times, Beijing requires official approval for each purchase.
Two things are worth seeing clearly. First, newer generations such as Blackwell did not get the case-by-case relaxation for China, and re-exports to China from other countries still face presumption of denial. Second, US bills that would require allies such as the Netherlands and Japan to match equipment controls (such as the MATCH Act) have been folded into amendments to the Senate’s defense authorization bill. As of late September 2026, they were still stuck in the Senate and had not passed.
The Impact on Taiwan and the Supply Chain
Companies such as TSMC must follow BIS rules in customer screening, product destination, and capacity allocation. How much this matters depends on the product category, end use, end user, and whether the product falls under the FDPR. After HBM was brought under control at the end of 2024, the memory and advanced-packaging chains also gained destination and end-use checks.
Penchan’s summary
Start with the three tools: the Entity List names specific recipients, the FDPR covers foreign products that use US technology, and case-by-case review is an individual judgment, not a green light.
When reading related news, first ask whether it is “a rule already in force” or “a bill, a draft, or a report.” The two affect the supply chain very differently.
For the full picture of the chip war, see the Chip War; for the geopolitical meaning of Taiwan’s semiconductors, see the Silicon Shield; for Taiwan’s industrial division of labor, see Taiwan’s Semiconductor Supply Chain; to revisit all eight gates of the chain, go back to the supply-chain overview.