The US classifies a number of semiconductors as essential to national security.
REPUBLIKA.CO.ID, JAKARTA — The United States Department of Commerce (US) has proposed rules to prevent funds in semiconductor manufacturing and research funds from being used by China and other countries deemed to be of concern. The fund could reach 52 billion US dollars.
The proposal limits US grantees from investing in expanding semiconductor manufacturing in foreign countries of concern such as China and Russia, and limits grantees with incentives to engage in joint research or technology licensing efforts with foreign entities of concern.
It also classifies some semiconductors as essential for national security. This size covers chips, including current-generation chips and mature nodes used for quantum computing, in radiation-intensive environments, and for other special military capabilities.
“This fence will help ensure we stay ahead of the adversary for decades to come,” said US Secretary of Commerce Gina Raimondo as quoted by Reuters in Jakarta, Wednesday (22/3/2023).
The US Department of Commerce plans to begin accepting applications in late June for a US$39 billion semiconductor manufacturing subsidy program. The law also creates a 25 percent investment tax credit to build chip factories estimated to be worth $24 billion.
In October, the department passed a new export policy to cut China off certain semiconductor chips made anywhere in the world with US equipment, expanding its reach in its bid to slow Beijing’s technological and military advances.
The rules, which build on restrictions sent in letters last year to top toolmakers KLA Corp, Lam Research Corp and Applied Materials Inc, effectively require them to stop shipping equipment across China.
The US Department of Commerce will strengthen those controls by aligning the prohibited technology thresholds for memory chips between export controls and the CHIPS national security fence and incorporating stricter thresholds for logic chips than those used for export controls.