In a bid to safeguard national security, especially in the tech sector, the United States’ Commerce Department announced that it is finalizing a set of regulations that will keep China and other nations from availing subsidies related to semiconductor production.
Initially proposed in March of this year, this regulation is the final step towards the implementation of the US government’s Chips and Science Law. Under this landmark legislation the government is set to provide around $52.7 billion in subsidies for initiatives related to research, production, and workforce building within the semiconductor industry.
Once the new regulations are approved, the Biden Administration will be able to distribute up to $39 billion in related subsidies.
What are These Regulations For?
The aforementioned regulations will keep recipients of government funding from investing in semiconductor production initiatives in nations like China and Russia, both of which have interests that could prove detrimental to the United States’ national security.
Recipients are also banned from participating in any joint research and licensing initiatives in any countries or foreign firms of concern.
Likewise, it is expected that the final set of rules also seeks to ban the expansion of any form of semiconductor manufacturing activity in state-of-the-art facilities in countries of concern, including wafer production, the addition of new cleanroom space, as well as production lines that could increase any facility’s total production capacity over 10%.
Under regulations, these prohibitions will remain in place for a ten-year period.
