U.S. House investigation: China is using new avenues to advance AI chips, creating U.S. vulnerabilities in foundational semiconductors

On October 7, 2025, the U.S. House Select Committee on China published the results of an investigation into China’s purchase of equipment for producing high-tech chips through intermediaries in the U.S. and allied countries, totaling $38 billion.

Among the companies whose chip sales to China accounted for over 39% of their total sales were three American firms—Applied Materials, Lam Research, and KLA—which lawmakers urged to reduce their sales.

Given that China controls the market for fundamental chips (simpler, durable, and cost-effective chips suitable for reliable but less computationally complex applications), which has enabled it to use this equipment as a tool to limit Western weapons production, Beijing is testing a similar approach for high-tech chips imported through circumvention mechanisms.