US bars 'advanced tech' firms from building China factories for 10 years
US bars 'advanced tech' firms from building China factories for 10 years
US tech companies that receive federal funding will be barred from building "advanced technology" facilities in China for 10 years, the Biden administration has said.
The policies were revealed as part of a $50 billion (£43 billion) initiative to expand the domestic semiconductor industry.
It occurs at a time when industry associations have lobbied for further government assistance in an effort to lessen reliance on China.
Due to a global shortage of microchips, output has stalled.
For a period of ten years, recipients of CHIPS monies will be subject to the guardrails that will prevent them from jeopardizing national security. They will not be permitted to invest in China or create cutting-edge technology there. according to US Commerce Secretary Gina Raimondo., the US Chips and Science Act is explained.
The recipients of the funds can only increase the size of their mature node plants in China in order to meet Chinese demand.
The US and China are locked in a long-running dispute over trade and technology.
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A measure devoting $280 billion (£232 billion) to high-tech industry and scientific research was signed by US President Joe Biden in August amid worries that China is eroding the US's technological advantage.
Tax incentives are included in the investments for businesses constructing computer chip manufacturing facilities in the US.
Since 1990, the US has decreased its production of semiconductors, which are essential to everything from cars to mobile phones, from over 40% to about 10% of the global supply.
The semiconductor bill was opposed by the Chinese Embassy in Washington, which claimed it was reminiscent of a "Cold War mentality."
The consequences of Washington's restrictions on the export of US technology to China are already being felt by some US chipmakers. US officials ordered Nvidia and AMD earlier this month to halt selling artificial intelligence processors to China.
The limitations, according to Dan Ives of Wedbush Securities, are a "gut punch" for Nvidia.
According to Mr. Ives, who spoke to the BBC, "This is truly a shot across the bow at China and it's really going to feed those flames in terms of geopolitical (tensions)".