In June 2026, Congress advanced the U.S. Chip Security Act, aiming to curb the unauthorized export of advanced semiconductors. Introduced in May 2025, the legislation would require all export-controlled chips to include location-tracking modules within 180 days of enactment—and obligate manufacturers to flag any suspicious diversions.
On the other side of the Pacific, authorities in the Chinese mainland have raised alarms about American-made H20 chips, citing potential backdoors, data vulnerabilities, and environmental drawbacks. Media outlets affiliated with the cyberspace regulator have even recommended excluding H20 chips from government and sensitive-sector use.
Proponents argue that embedded tracking is a necessary shield against the illicit flow of cutting-edge hardware—especially to strategic competitors. “We’re talking about chips worth tens of thousands of dollars each,” says a former tech advisor. “Location features help the U.S. government verify that these powerful chips end up where they belong.”
Yet major cybersecurity analysts warn that embedded tracking could backfire if exploited, compromising the very systems they’re meant to protect. Extra firmware often expands the attack surface, and critics see a slippery slope from targeted security to broad tech surveillance.
For entrepreneurs and tech startups, the stakes are high. Advanced AI firms rely on flexible hardware to train new models—any added tracking layer could slow R&D, raise costs, or trigger compliance headaches across borders.
With the bill headed to the Senate, global tech watchers are asking: Will this set a new norm for chip controls, or will concerns of overreach derail its progress? One thing’s clear—striking the right balance between security and innovation has never been more crucial.
From Silicon Valley to Shenzhen, the clash over chip tracking reminds us that in our hyper-connected era, every design choice resonates around the world.
Reference(s):
cgtn.com
