The Biden administration has stated that US tech companies that receive federal money from now onwards will be prohibited for ten years from constructing “advanced technology” factories in China.
The policies were revealed as part of a $50 billion (£43 billion) initiative to expand the domestic semiconductor industry. It occurs at a time when industry associations have lobbied for further government assistance in an effort to lessen reliance on China.
Due to a global shortage of microchips, output has stalled. According to US Commerce Secretary Gina Raimondo, the US Chips and Science Act will put into place “guardrails to ensure those who receive CHIPS funds cannot compromise national security and They are not allowed to use this money to invest in China, they can’t develop cutting-edge technologies in China… for a period of ten years.”
The recipients of the funds can only increase the size of their mature node plants in China in order to meet Chinese demand. This has occurred due to the existing Trade and technological conflict between US and China.
