§2.Annual report on advanced semiconductor manufacturing capabilities of China
This section requires the Secretary of Defense, in consultation with heads of other federal departments and agencies as appropriate, to submit to the Armed Services Committees of the House of Representatives and the Senate a report on the semiconductor manufacturing capabilities (including advanced and mature-node semiconductors) of the People's Republic of China not later than May 1, 2026, and annually thereafter for five years.
The report must include the following elements:
(1) key findings and assessments on the U.S. strategy to counter China, with specific policy recommendations to Congress;
(2) an assessment of China's domestic semiconductor manufacturing capabilities;
(3) a detailed analysis of China's industrial policies and their outcomes on such capabilities;
(4) a year-by-year assessment of China's technological development in semiconductor manufacturing and artificial intelligence chipmaking, addressing gains across design, intellectual property, research and development, silicon and critical minerals, industrial gases, intermediaries (e.g., photomasks), equipment, tools, software, and advanced packaging;
(5) a description of China's engagement with other foreign countries on semiconductor manufacturing equipment capabilities, including coordination to expand influence and foreign investment, trade, and research ties;
(6) an analysis of collaboration, joint ventures, or partnerships between China and other foreign countries on semiconductor manufacturing;
(7) an analysis of the impact and effectiveness of U.S. and allied/partner export controls on covered items related to China's semiconductor manufacturing development, including protections against workarounds, loopholes, circumvention via foreign investments or third-party acquisitions, and risks from collaborative agreements, partnerships, supplier relocations, or contractual relationships;
(8) an assessment of whether such export controls remain effective in curbing China's semiconductor manufacturing equipment capabilities, with recommendations to enhance effectiveness; and
(9) an assessment of the implications of Chinese semiconductor manufacturing dominance for U.S. global competitiveness, national security, national economic security, and national economy.
The report must be submitted in unclassified form with a classified annex and include the unclassified portion (or an unclassified synopsis) on a publicly available federal government website, with concurrent notice published in the Federal Register.