New Commerce Department rules say chip makers won’t expand capacity in China for 10 years if they receive funding from a $39 billion federal fund designed to build the U.S.’s cutting-edge semiconductor industry. I have to agree.
The ministry on Tuesday sought to apply for funding from the Chipping Act passed by Congress last year as it launched a landmark industrial policy program to counter China.
In announcing the move, Commerce Secretary Gina Raimond emphasized that safeguards will be in place to ensure the program is not abused.
“Recipients must enter into agreements that limit their ability to expand semiconductor manufacturing capacity in foreign countries of interest for 10 years after receiving funding,” Raimondo said, without naming China. rice field.
She added that funded companies “must not knowingly engage in joint research or technology licensing efforts with interested foreign parties involving highly sensitive technologies or products.”
Congress passed the Chip Act to create an industry capable of mass-producing cutting-edge semiconductors, most of which are now made in Taiwan. In addition to measures to help U.S. companies, the Commerce Department has taken steps to slow down China’s chip-making industry, and last October announced a drastic export cut that would make it harder for Beijing to get access to advanced chips. Administrative regulations were imposed.
“Our goal is to make sure that the U.S. … every company that can produce cutting-edge chips is the only country in the world that can do it at scale in the U.S.,” said Raimondo. says.
Commerce Department officials said businesses that received more than $150 million will have to return some money to the government if they generate revenues above initial projections by an agreed threshold. rice field.
The official said the $39 billion could be used to provide another $75 billion in federally-backed funding. “The total possible program expenditure… could well exceed $100 billion.”
Raimondo said companies would have to agree to other restrictions, such as a ban on using the money to buy back shares or pay dividends.
“I also want to be clear that chip dollars cannot be used to buy back shares,” Raimond said. “This is about investing in national security, not allowing these companies to use our money to make a profit.”
Raimondo added that companies applying for more than $150 million should explain in advance how they will provide workers with affordable childcare. .
“This is a math problem. It’s the single biggest factor,” Raimondo said.
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