The Biden administration has said that U.S. technology companies that receive federal funding will be prohibited from building “advanced technology” plants in China for the next decade.
This is part of a US$50 billion plan to boost the local semiconductor industry, which business groups have been pushing to reduce dependence on China and offset a global shortage of microchips that has slowed production.
The U.S. Chips and Science Act (CHIPS), passed by Congress in August, is part of America’s response to a protracted technological standoff between Washington and Beijing, in which US firms seek more government support to reduce their dependence on Chinese factories.
“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,” said U.S. Commerce Secretary Gina Raimondo.
Moreover, the industry has gained geopolitical importance as China has begun to position itself on the global stage under President Xi Jinping, leading to increased investment and expansion of semiconductor production in the United States, Japan, and the European Union.
U.S. officials also called on Nvidia and AMD earlier this month to stop selling artificial intelligence chips to China, which the Chinese embassy in Washington called a Cold War mentality.
The sources for this piece include an article in BBC.