US finalizes rules to prevent China from benefiting from $52 billion in chips funding

The U.S. Commerce Department on Friday is issuing final rules to prevent semiconductor manufacturing subsidies from being used by China and other countries deemed to pose American national security concerns. The regulation is the final hurdle before the Biden administration can begin awarding $39 billion in subsidies for semiconductor production. The landmark “Chips and Science” law provides $52.7 billion for U.S. semiconductor production, research and workforce development. The regulation, first proposed in March, sets “guardrails” by limiting recipients of U.S. funding from investing in expanding semiconductor manufacturing in foreign countries of concern like China and Russia, and limits recipients of incentive funds from engaging in joint research or technology licensing efforts with foreign entities of concern. In October 2022, the department issued new export controls to cut China off from certain semiconductor chips made with U.S. equipment in its bid to slow Beijing’s technological and military advances. “We have to be absolutely vigilant that not a penny of this helps China to get ahead of us,” Commerce Secretary Gina Raimondo told Congress Tuesday. If funding recipients violate restrictions, Commerce Department can claw back federal awards. Raimondo told Congress she is working as fast as possible to get awards approved. “I feel the pressure,” Raimondo said. “We are behind but it is more important that we get it right. And if we take another month or a few more weeks to get it right, I will defend that because it’s necessary.”

Full report : The US issues final rules to stop Chips Act subsidies from going to countries of concern, like China, such as limiting foreign chip fab expansions for 10 years.