Taiwan Semiconductor Manufacturing (TSM) is under pressure as US lawmakers urge tighter rules on chip contract manufacturing to prevent advanced AI chips from reaching overseas subsidiaries of Chinese firms, Reuters reported Tuesday.

A bipartisan pair of US senators urged the Commerce Department's Bureau of Industry and Security to close loopholes that could allow front companies for Chinese firms to order custom chips from major foundries such as Taiwan Semiconductor Manufacturing, Reuters said.

The push follows recent moves by the Trump administration to clarify that subsidiaries of Chinese companies in third countries require licenses for advanced chip sales, according to the report.

The Bureau of Industry and Security and Taiwan Semiconductor Manufacturing did not immediately reply to MT Newswires' requests for comment.

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