The U.S. Department of Commerce’s Bureau of Industry and Security has ended a Biden-era expansion of export privileges that allowed select foreign semiconductor manufacturers to ship U.S.-origin technology to China without a license.
The bureau said Friday it closed the loophole under the Validated End-User program, which permitted a handful of companies to export semiconductor manufacturing equipment and related technologies license-free to support chipmaking operations in China. No U.S.-owned fabs ever qualified for that benefit.
Under the new rule, former VEU participants will have 120 days from the Federal Register’s publication date to apply for export licenses to continue operating their existing Chinese facilities.
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“The Trump administration is committed to closing export control loopholes — particularly those that put U.S. companies at a competitive disadvantage. Today’s decision is an important step toward fulfilling this commitment,” said Jeffrey Kessler, undersecretary of commerce for industry and security.
The change follows a series of recent BIS actions tightening export controls on China. In January, the bureau introduced new regulations restricting shipments of advanced computing semiconductors and adding 16 Chinese and Singaporean entities to the Entity List. Then-Commerce Secretary Gina Raimondo said those rules were designed to prevent Beijing from accessing the most advanced U.S. chip technologies for military applications.
The VEU program, which also applies to India, was originally created to streamline high-tech trade with trusted partners. Going forward, BIS said it will maintain licenses for existing operations but will not accept applications from companies seeking to expand semiconductor activity in China.