Monitoring Desk
WASHINGTON: Chip companies receiving US federal funds to boost their semiconductor industry will face several restrictions growing their production capacity in countries like China for ten years, said Commerce Department rules released Tuesday.
The rules apply to a $39 billion fund under the Chips and Science Act signed into law last year, and with the Commerce Department’s Chips Program Office soon seeking applications for this financing.
Commerce Secretary Gina Raimondo said that the United States would be “implementing several safeguards” to ensure that recipients are progressing towards meeting the country’s national security goals.
“Recipient companies will be required to enter into an agreement restricting their capability to expand semiconductor production capacity in foreign countries of concern for ten years after taking the money,” Raimondo added.
While she did not mention China by its name, the Chips Act defines these nations of concern as including North Korea, China, Iran, and Russia.
Every country able to produce leading-edge chips in US
Raimondo said in a call with reporters that the goal is to ensure the United States is the only country across the world where every company able to produce leading-edge chips will be doing that at scale.
President Joe Biden’s signature Chips Act earmarks almost $53 billion for the US semiconductor industry, a sector where cutting-edge production is mainly in Asia.
Meanwhile, the United States has tightened chip export controls to China, complicating Beijing’s push to further its semiconductor industry and develop advanced military systems.
Other restrictions that recipients of federal funding must adhere to include not using the financing for dividends or stock buybacks.
Applicants asking for more than $150 million in funding must also provide a plan for access to affordable and reliable child care for facility and construction workers.
