To reduce supply chain dependency on China, Biden Administration has barred US Tech companies that receive federal funding from building ‘Advanced technology’ facilities in China for a period of 10 years. The order was passed as a part of a $50 billion plan aimed at building and protecting the local American semiconductor industry.
Faced with a global chip shortage, resulting in a major loss of business, due to heavy reliance on China for semiconductors, business groups pushed for more government support for local production.
“We’re going to be implementing the guardrails to ensure those who receive CHIPS funds cannot compromise national security… they’re not allowed to use this money to invest in China, they can’t develop leading-edge technologies in China…. for a period of ten years,” according to US Commerce Secretary Gina Raimondo., explaining the US Chips and Science Act.
“We’re also going to be implementing the guardrails to ensure those who receive CHIPS funds cannot compromise national security by — 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 the latest technology overseas,”
– US Commerce Secretary Gina Raimondo.
The US currently produces roughly 10% of the global supply of semiconductors, which are key to everything from cars to mobile phones, down from nearly 40% in 1990. Earlier this month, Nvidia and AMD were told by US officials to stop the sale of artificial intelligence chips to China.
“First and foremost, this is about protecting our national security and providing a blueprint for long-term economic prosperity.” Secretary Raimondo added.