Biden administration bars CHIPS Act funding recipients from increasing in China

Chipmakers hoping to faucet into the Biden administration’s $39 billion semiconductor manufacturing subsidy program might want to signal agreements promising they received’t broaden manufacturing capability in China. The requirement was amongst a handful of funding situations the US Commerce Division outlined this week after it might start accepting functions for cash from the CHIPS Act in late June. Congress the $280 billion measure final July in a uncommon present of bipartisan cooperation and put aside $52 billion in tax credit and funding for US semiconductor corporations to broaden home manufacturing.

“Recipients shall be required to enter into an settlement proscribing their skill to broaden semiconductor manufacturing capability in overseas international locations of concern for a interval of 10 years after taking the cash,” Commerce Secretary Gina Raimondo informed reporters, per the . Raimondo didn’t identify China by identify. Nevertheless, the superpower is among the many nations the US authorities considers a “overseas nation of concern.”

Moreover, Raimondo stated CHIPS Act recipients can not “knowingly interact in any joint analysis or expertise licensing effort with a overseas entity of concern that entails delicate applied sciences or merchandise,” a requirement doubtless designed to discourage home corporations from signing agreements just like the one Ford not too long ago .

“I additionally wish to be clear that no CHIPS {dollars} will be spent on inventory buybacks,” Raimondo stated. “That is about investing in our nationwide safety, not enabling these corporations to make use of our cash to extend their earnings.” The Commerce Division will even require corporations making use of for greater than $150 million to stipulate how they plan to offer reasonably priced childcare to employees, a funding situation Raimondo stated displays the present labor market. In some situations, the company could require those self same recipients to return a few of the cash they obtain from the CHIPS Act to the federal government in the event that they generate extra earnings. 

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