New Chip Security Act Mandates GPS Tracking on Advanced Exported Chips Within 180 Days

The newly proposed Chip Security Act is all about protecting America’s lead in high-tech, especially artificial intelligence (AI), by putting digital guardrails on our most advanced computer chips when they leave the country. Essentially, Congress wants U.S.-developed AI to be the global standard, and they’re using export control as the hammer to make sure that happens. The bill’s core action is simple: if you export certain high-end chips, they need built-in security that can verify their location.

The Digital Guardrail: Your Chip’s New GPS

Section 4 is where the rubber meets the road for manufacturers and exporters. Within 180 days of this bill becoming law, the Secretary of Commerce must require that all "covered integrated circuit products" have a chip security mechanism installed. Think of a covered product as any seriously advanced chip or computer system (specifically those under ECCNs 3A090, 3A001, 4A090, or 4A003). This mechanism must be able to verify the chip’s location using "contemporaneously practical techniques." This means that for the first time, certain exported chips will essentially have a mandatory, active tracking system built in.

For the companies exporting these chips, this is a major compliance shift. Not only do they have to install this location-verification tech, but if they find out the chip was diverted to an unauthorized user or if someone tried to tamper with the tracking features, they have to report it immediately to the Commerce Department. This puts a heavy burden of continuous monitoring and liability on the exporter, potentially adding significant cost and complexity to their supply chain management.

The Cost of Control: Performance and Price

If the initial tracking requirement wasn't enough, the Secretary of Commerce must also spend the next year studying and assessing secondary security mechanisms. These aren't just about tracking; they’re about things like anti-tampering measures, verifying workloads, and—get this—even the ability to remotely change a chip’s function if it’s stolen. The Commerce Department has to analyze the cost, the performance impact, and whether these features might accidentally create new security vulnerabilities.

This is a critical point for anyone working with these chips. If you’re a designer, manufacturer, or end-user in an allied country, mandatory anti-tampering features or remote functional changes could potentially degrade performance or introduce new, unwanted complexities. Imagine buying a high-performance computer only to find out mandatory security features slow down its processing speed or create a new point of failure. The bill acknowledges these concerns by requiring the Secretary to analyze them, but it still grants the authority to mandate these potentially costly and performance-hindering features within two years.

The Trade-Off: Security for Flexibility

Why go through all this effort? Congress believes that if these security mechanisms work well—meaning they can reliably track and protect the chips from misuse—it could actually allow the U.S. to be more flexible with its export rules down the line. The idea is that better security might mean more advanced chips can be shipped faster and in greater numbers to international partners who are playing by the rules. For U.S. allies, this is the carrot: endure the tracking and security requirements now, and maybe you get faster access to cutting-edge U.S. technology later.

Ultimately, this bill is a huge power boost for the Secretary of Commerce, granting them substantial new authority to monitor the location and end-use of high-tech hardware globally. While the goal is clear—national security and maintaining technological leadership—the mechanism involves significant new compliance costs for exporters and introduces mandatory tracking and security features that could impact the performance and functionality of advanced chips for everyone who uses them.