US Implements Final Rules to Safeguard Chip Funds from China's Benefit

The Biden administration has issued final rules aimed at preventing chip companies from using new U.S. subsidies to benefit China. The regulations prohibit firms that receive federal money from using it to construct chip factories outside the United States and restrict companies from significantly expanding semiconductor manufacturing in "foreign countries of concern" (China, Iran, Russia, and North Korea) for 10 years after receiving an award. The rules also prevent companies from carrying out certain joint research projects or licensing technology that would raise national security concerns in those countries. Violations could result in the government clawing back the firm's entire award. The rules take into account the industry's perspective and aim to strike a balance between being restrictive and not overly disruptive to existing facilities in China.