U.S. Issues Final Rules to Keep Chip Funds Out of China – The New York Times
U.S.-China Relations
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The rules, which aim to prevent chip makers from using new U.S. subsidies to benefit China, take into account the industry’s perspective.
The Biden administration on Friday issued final rules that would prohibit chip companies vying for a new infusion of federal cash from carrying out certain business expansions, partnerships and research in China, in what it described as an effort to protect United States national security.
The regulations come as the Biden administration prepares to disburse more than $52 billion in federal grants and tens of billions of dollars of tax credits to build up the U.S. chip industry. The new rules aim to prevent chip makers that benefit from U.S. grants from passing technology, business know-how or other benefits to China.
The final restrictions will prohibit firms that receive federal money from using it to construct chip factories outside the United States. They also restrict companies from significantly expanding semiconductor manufacturing in “foreign countries of concern” — defined as China, Iran, Russia and North Korea — for 10 years after receiving an award, the administration said.
The rules also prevent companies that receive funding from carrying out certain joint research projects in those countries, or licensing technology that would raise national security concerns to those countries.
If a company violated those guardrails, the Commerce Department said, the government could claw back the firm’s entire award.
“These guardrails will protect our national security and help the United States stay ahead for decades to come,” Gina M. Raimondo, the secretary of commerce, said in a statement.
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