The Department of Commerce of the United States has ruled that chip manufacturers must forego expansions in China for ten years if they want $39 billion in government funding. The money from the fund will go towards the development of the American semiconductor industry.
The US Department of Commerce has urged local semiconductor manufacturers to apply for government subsidies under the Chip Act, a program designed to combat the Chinese technological threat. “Recipients will be required to enter into an agreement to limit their ability to expand semiconductor manufacturing capacity in foreign countries of concern for ten years following receiving the money,” according to Ms. Raimondo.
The official added that firms that received funding should not "knowingly engage in any joint research or technology licensing with a foreign organization of concern about important technologies or products." Last year, the US Congress passed the "Chip Act," aimed at establishing a sector capable of mass-producing advanced semiconductor goods, which until now are mostly manufactured in Taiwan.
If a company receives state subsidies, they will have to agree to other requirements. If the amount of funds exceeds $150 million, it will have to return some of them to the state when it attains its established income level. The funds allocated to companies will not be used to buy back their own shares or pay dividends. Furthermore, another $75 billion may be added to the $39 billion allocated for the development of the industry.
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