U.S. Sets Rules To Prevent China From Accessing Part Of $52-B Chip Fund

The US Commerce Department has issued the final rules aimed at preventing semiconductor manufacturing subsidies from benefiting China and other countries considered to pose national security concerns for the United States, as reported by David Shepardson for Reuters.

This regulation represents the last hurdle before the Biden administration can commence awarding $39 billion in subsidies for semiconductor production.

This regulation represents the last hurdle before the Biden administration can commence awarding $39 billion in subsidies for semiconductor production.

The groundbreaking "Chips and Science" law allocates $52.7 billion for US semiconductor production, research, and workforce development.

The regulation, initially proposed in March, establishes "guardrails" by restricting recipients of US funding from investing in the expansion of semiconductor manufacturing in China and Russia. It also limits recipients of funds from engaging in joint research or technology licensing efforts with foreign entities of concern.

In October 2022, the department introduced new export controls designed to cut off China's access to certain semiconductor chips produced with US equipment, aiming to slow Beijing's technological and military advancements.

"We must remain absolutely vigilant to ensure that not a single penny contributes to China surpassing us," remarked Commerce Secretary Gina Raimondo during her congressional testimony on Tuesday.

If funding recipients violate these restrictions, the Commerce Department retains the authority to reclaim federal awards.

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