Chipmakers hoping to take advantage of the Biden administration’s $39 billion semiconductor manufacturing subsidy program will have to sign agreements promising they won’t expand production capacity in China. The requirement was among a handful of financing conditions the US Commerce Department outlined this week after would begin accepting applications for CHIPS money at the end of June. Congress passed the $280 billion measure last July in a rare show of bipartisan cooperation and set aside $52 billion in tax credits and financing for American semiconductor companies to expand domestic production.
“Recipients will be required to enter into an agreement that restricts their ability to expand semiconductor manufacturing capacity in foreign countries of interest for a period of 10 years after receiving the money,” Commerce Secretary Gina Raimondo told reporters. , according to the website. . Raimondo did not name China after him. However, the superpower is among the nations that the US government considers a “foreign country of concern.”
In addition, Raimondo said that CHIPS Act beneficiaries may not “knowingly participate in any joint research or technology licensing effort with a foreign entity of interest involving sensitive technologies or products,” a requirement likely designed to discourage companies from nationals to sign deals like the one with Ford recently.
“I also want to be clear that CHIPS dollars cannot be spent on share repurchases,” Raimondo said. “This is about investing in our national security, not about letting these companies use our money to increase their profits.” The Commerce Department will also require companies requesting more than $150 million to describe how they plan to provide affordable child care to workers, a funding condition that Raimondo says reflects the current job market. In some cases, the agency can require those same recipients to return part of the money they receive from the CHIPS Act to the government if they generate excess profit.
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