US bans ‘advanced tech’ firms from building facilities in China for a decade
US technology firms that receive government funding will be banned from building “advanced technology facilities” in China for a decade, the Biden administration has announced, as it outlined plans to boost domestic production of semiconductors.
The requirements come under the US government’s near-$53bn (£46bn) plan to scale up manufacturing of semiconductor chips – the “brain” in every electronic device from cars to household appliances – which are currently predominantly produced in Asia.
The US Chips and Science Act (Chips), approved by Congress in August, is part of the American response to a long-running technological dispute between Washington and Beijing, as US firms demand more government support to reduce reliance on components produced in Chinese factories.
The US Department of Commerce said it hopes to begin seeking applications by next February for $39bn in government semiconductor subsidies to build new production facilities in the US. The plan will also give a 25% investment tax credit for chip plants, where construction begins in 2023 onwards.
“We’re also going to be implementing the guardrails to ensure those who receive Chips funds cannot compromise national security,” the US commerce secretary, Gina Raimondo, said.
“They’re not allowed to use this money to invest in China; they can’t develop leading-edge technologies in China; they can’t send latest technology overseas.”
The US currently only produces about 10% of the world’s supply of semiconductors, and most chips are manufactured in factories in Taiwan and South Korea.
Global shortages of computer chips, prompted by the coronavirus pandemic, have caused large production delays for carmakers in the UK and beyond, as well as for technology companies and other
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