Biden administration moves to stop China and Russia from using US chips funding
- The Commerce Department’s proposed guidelines say firms can’t use the funds for projects outside the US or to build facilities in ‘foreign entities of concern’
- There are also plans to restrict joint research or tech licensing for certain types of semiconductors deemed ‘critical to national security’
The US Commerce Department released proposed guidelines on Tuesday to prevent China, Russia, Iran and North Korea from benefiting from US$52 billion in federal funding for semiconductor production.
Companies receiving a portion of the funding will not be allowed to use the funds for projects outside the US. Recipients will also be barred from building or significantly expanding semiconductor manufacturing facilities in the “foreign entities of concern” for the next 10 years, even with their own capital.
The Commerce Department also plans to designate certain types of chips, including those used for quantum computing, in “radiation-intensive environments” and for other military use, as “critical to national security”.
Funded companies will be restricted from conducting joint research or licensing technology from the foreign entities of concern.
If a company violates the rules, the federal government can take back all CHIPS and Science Act funding doled out to the company.
“These guardrails will help ensure we stay ahead of adversaries for decades to come,” Commerce Secretary Gina Raimondo said in a statement. The CHIPS and Science Act “is fundamentally a national security initiative and these guardrails will help ensure malign actors do not have access to the cutting-edge technology that can be used against America and our allies”.