The U.S. Tightens Export Controls Over Global Chip Supply Chains to Cut Off PRC Subsidiary Networks

On May 31, 2026, the U.S. Department of Commerce closed one of the most vulnerable loopholes in the export-control regime for AI chips. Licensing requirements now also apply to foreign subsidiaries of Chinese companies, even when those entities are registered outside China.

This was a response to the delivery of large volumes of advanced chips to Chinese structures through third countries, particularly in Southeast Asia.

The decision shows that, for the United States, chips are becoming an instrument of strategic deterrence, meaning a resource whose access is determined by political loyalty, jurisdiction, and the security profile of the buyer. After several years of targeted bans, Washington is moving toward a model in which the global supply chain is treated as an environment to be reorganized around state objectives.