Months ago, the United States enacted the “Chip and Science” law and began providing $52.7 billion in subsidies and support for semiconductor production, research and workforce development. However, the United States is also taking steps to ensure that these subsidies do not benefit China in particular and also Russia.US imposes restrictions on subsidy recipients from China
The regulation, first proposed in March, creates “guardrails” that would limit U.S. fund recipients from making semiconductor investments in foreign countries of concern, such as China and Russia. While restricting the direct investment of companies benefiting from the US’s $52.7 billion subsidy and support program to China is already a huge loss for the other side of the ocean, the US additionally limits joint activities with organizations in China.
In October 2022, the US issued new export controls to cut off China’s access to some semiconductor chips produced with US equipment in a bid to slow Beijing’s technological and military advances. A few months later, the Netherlands and Japan also joined these controls.
drastic measures
With the new regulation, if those who receive financing from the USA violate the restrictions, the Ministry of Commerce will have the authority to revoke these privileges. The regulation prohibits fund recipients from significantly increasing semiconductor manufacturing capacity in foreign countries of concern for 10 years. It also restricts recipients from some joint research or technology licensing efforts with foreign entities of concern. However, international standards allow patent licensing and the use of foundry and packaging services.
The final rules also prohibit significant expansion of semiconductor manufacturing capacity for leading and advanced facilities in foreign countries of concern for 10 years. It is also clarified that wafer production is included in semiconductor production.
The new rules are also likely to classify some semiconductors as critical to national security, triggering tighter restrictions, including quantum computing advanced chips for radiation-intensive environments and other specialized military capabilities.
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