Comment by Research Institute for Democracy, Society and Emerging Technology (DSET)

For the United States, Taiwan, Japan, South Korea, the Netherlands, and other democratic technology allies and partners, this means that export controls must move beyond traditional node-centric thinking. Policies to promote allied advanced packaging capacity remain important, but investment and capacity expansion alone cannot offset China’s advantages in back-end manufacturing and industrial scale. Democratic countries must also strengthen protective measures and build a more comprehensive regulatory architecture targeting China’s use of advanced packaging for technological workarounds and system-level compute expansion. The report offers the following policy recommendations. First, export controls should be systematically expanded to the advanced packaging supply chain, covering the materials, equipment and process technologies, finished products, and system integration capabilities that support AI and high-performance computing packaging. Second, specification-based controls should be established for key upstream materials such as ABF film, BT resin, low-dielectric specialty glass fiber cloth, and advanced bonding materials, distinguishing general commercial applications from high-end AI packaging uses through technical thresholds. Third, quantified control thresholds should be established for hybrid bonding, 2.5D and 3D heterogeneous integration, high-density substrate fabrication, fine-pitch micro-bumps, and related equipment, with deeper multilateral coordination among the United States, Japan, the Netherlands, South Korea, and other allies. Fourth, controls should expand from single-chip specifications to post-packaging system-level performance, covering finished substrates, packaged AI and high-performance computing modules, high-bandwidth memory, and end-use tracing. Fifth, an anti-circumvention architecture should be built to address third-country transshipment risks through mandatory disclosure obligations, anomalous order screening, transshipment verification, and multilateral information-sharing mechanisms, with stronger enforcement cooperation focused on Southeast Asia and other high-risk regions.