New Chip Export Controls: Understanding License Exception C75 for Low-Processing Performance Chips

In January, the Bureau of Industry and Security (BIS) introduced its Framework for Artificial Intelligence Diffusion to advance crucial United States national security and foreign policy objectives, while developing a secure and reliable technology environment for responsible AI development and adoption. This interim final rule (IFR) set country-specific quotas on GPUs and semiconductor hardware for AI and model weights. 

Exporters will need to comply with most changes by May 15, 2025, with a few remaining changes (in paragraphs 14, 15, and 18 of Supplement No. 10 to Part 748) set for a compliance date of January 15, 2026.

The new IFR introduces three exceptions, one of which is particularly relevant for global IT hardware shipments: License Exception C75 (Low Processing Performance—LPP).

This exception allows limited exports and reexports of certain advanced chips (integrated circuits or ICs) to most countries, excluding those in Country Group D:5 (including China, Russia, and others) and Macau.

Companies can export or reexport only a small quantity of these chips—far below what’s required to train powerful AI models. The limit is 26.9 million Total Processing Performance (TPP) units per end user, per year for specific chips. This exception doesn’t apply to exports through distributors or domestic chip transfers.

The entity owning the items (the 'ultimate consignee') must notify the Bureau of Industry and Security (BIS) once they reach the annual limit.

Before using this exception, the exporter must obtain certification from the ultimate consignee confirming that they have not received a cumulative 26,900,000 TPP during the relevant calendar year, and that the requested TPP for the transaction will not exceed the limit. The exporter must send this certificate to BIS via email (EARReports@bis.doc.gov, subject line ‘LPP Shipment’) within 30 days of the export or reexport of eligible items.

AES filers must follow the new reporting requirements for C75 (LPP) to avoid fatal errors from AES:

• Report License Code: C75 Low Processing Performance (LPP)

• Allowable ECCNs: 3A001.z.1.a, z.2.a, z.3.a, z.4.a; 3A090.a; 4A003.z.1.a, z.2.a; 4A004.z.1; 4A005.z.1; 4A090.a; 5A004.z.1.a, z.2.a; and 5A992.z.1

• Allowable countries: All except Macau and destinations listed in Country Group D:5 Allowable Export Information Codes: All except UG

• Allowable Modes of Transportation: All except ‘70’ (Fixed Transport)

This is a controlled exception allowing limited global shipments of advanced chips, while restricting exports to certain high-risk destinations. For more detailed information, learn about License Exception C75 for Low-Processing Performance Chips at the Code of Federal Regulations.