U.S. Congress Introduces Bill to Ban Use of Chinese Equipment in IRA Beneficiary Factories – BusinessKorea
On June 18 (local time) U.S. bipartisan lawmakers introduced a bill aimed at preventing semiconductor manufacturing equipment from being purchased from entities owned or controlled by China, Russia, North Korea, Iran, and other countries. This legislative move targets U.S. factories that have received support under the CHIPS Act, a federal law designed to boost domestic semiconductor manufacturing and research.
Senator Mark Kelly (D-Arizona), who introduced the bill, emphasized the importance of safeguarding U.S. semiconductor manufacturing facilities. "As the United States works to revive semiconductor manufacturing, we must do everything we can to prevent Chinese and other foreign adversaries from jeopardizing U.S. semiconductor manufacturing facilities," Kelly stated.
The bill comes amid growing concerns over China's National Integrated Circuit Industry Investment Fund, commonly known as the Big Fund. Lawmakers have expressed worries that China's state subsidies and aggressive market tactics could lead to Chinese-made general-purpose equipment being integrated into manufacturing plants in the U.S. and allied countries. "If left unchecked, China's state subsidies and aggressive market tactics could result in Chinese-made general-purpose equipment being placed in manufacturing plants in the U.S. and allied countries," lawmakers warned.
The U.S. administration is also exerting pressure on allies with less stringent controls, such as Japan and the Netherlands, to join in strengthening regulations on semiconductor manufacturing equipment for China. While the U.S. has imposed such restrictions on domestic companies like Applied Materials and Lam Research, Japan and the Netherlands have only participated in export restrictions, allowing maintenance work on equipment within China. Bloomberg reported that Japan and the Netherlands have opposed U.S. pressure. Equipment from ASML and Tokyo Electron is used in the production of DRAM semiconductor molds, and SK Hynix also uses ASML and Tokyo Electron equipment for HBM manufacturing, according to Bloomberg's analysis.
Korean semiconductor equipment companies such as Hanmi Semiconductor and Hanwha Precision Machinery also play crucial roles in the HBM supply chain. The U.S. government has requested the South Korean government to limit the leakage of equipment and technology to China, Bloomberg previously reported.
In addition to these measures, Reuters reported that the U.S. is discussing adding 11 more Chinese semiconductor manufacturing plants to the sanctions list, which currently includes only five, including SMIC.
The CHIPS Act, which provides substantial funding and incentives to companies to build and expand semiconductor manufacturing facilities within the United States, restricts companies benefiting from it from significantly increasing production in China or adding manufacturing plants there. This legislative effort reflects bipartisan support in the U.S. Congress for measures aimed at countering China's technological advancements and underscores the broader geopolitical and economic implications of such measures.
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