Singapore: U.S. Firms Must Comply with Export Controls

Singapore's Ministry of Trade and Industry (MTI) has issued a statement emphasizing the importance of U.S. companies operating in Singapore complying with U.S. export controls, following questions raised over the provenance of semiconductors used by Chinese AI startup DeepSeek. The statement comes amidst an investigation by U.S. officials into whether DeepSeek acquired advanced Nvidia chips via third parties in Singapore, potentially circumventing U.S. export restrictions.

Singapore, an international business hub, is home to significant operations of major U.S. and European companies, including Nvidia. The MTI statement noted that Nvidia has explained that many of these customers use their business entities in Singapore to purchase chips for products destined for the U.S. and other Western countries. However, this has raised concerns about the potential diversion of these chips to China, which is subject to U.S. export restrictions.

The investigation into DeepSeek's acquisition of Nvidia chips has put Singapore under the spotlight, with U.S. lawmakers urging stricter licensing requirements for chip exports to Singapore. U.S. Representatives John Moolenaar and Raja Krishnamoorthi sent a letter to National Security Advisor Mike Waltz, urging the administration to subject countries to strict licensing requirements if they were not willing to crack down on shipments to China.



Singapore accounts for approximately 20% of Nvidia's reported revenue, but most of this revenue does not involve chips physically shipped to Singapore. Instead, it involves orders placed by Singaporean entities but destined for other countries, some of which could include China. Nvidia has clarified that it tracks 'bill to' locations, not 'hip to' locations, which means Singapore-based buyers could place large orders for chips meant for delivery elsewhere.

The MTI statement emphasized that Singapore expects U.S. companies to comply with U.S. export controls and local laws. The ministry also stated that its customs and law enforcement agencies will continue to work closely with their U.S. counterparts to ensure this compliance. Singapore's commitment to upholding the rule of law and acting decisively against individuals and companies that flout the rules was also reiterated.

The investigation into DeepSeek's acquisition of Nvidia chips has raised concerns about the potential circumvention of U.S. export controls. If it is found that DeepSeek obtained these chips through intermediaries in Singapore, it could have significant implications for future U.S.-Singapore trade relations and Singapore's position as a destination for U.S. companies. However, Singapore's commitment to enforcing export controls and maintaining its reputation as a trusted partner for U.S. companies could help mitigate these potential impacts.

In conclusion, Singapore's stance on U.S. export controls is clear: U.S. companies operating in Singapore must comply with U.S. export controls and local laws. The investigation into DeepSeek's acquisition of Nvidia chips has highlighted the importance of enforcing these controls, and Singapore is taking steps to ensure that its customs and law enforcement agencies work closely with their U.S. counterparts to achieve this. The outcome of the investigation will likely shape the future of U.S.-Singapore trade relations and Singapore's position as a destination for U.S. companies.