EU seeks to stop China benefiting from $52 billion for chips

He United States Department of Commerce on Tuesday released proposed rules to prevent China and other countries considered worrisome from using $52 billion of funds earmarked for semiconductor manufacturing and research.

The proposal limits recipients of US funds from investing in expanding manufacturing of semiconductors in countries of concern, such as China and Russia, and limits the ability to engage in joint research or technology licensing activities with a foreign entity of concern.

It also classifies some semiconductors as critical to national security, subjecting them to more stringent restrictions.

This measure covers chips including “current-generation and mature-node chips used for quantum computingin radiation-intensive environments and for other military capabilities specialized”.

Commerce Secretary Gina Raimondo stated that “these safeguards will help ensure that we stay ahead of adversaries for decades to come.”

The Commerce Department is scheduled to begin accepting applications at the end of June for a $39 billion semiconductor manufacturing grant program. The law also creates a investment tax credit 25% for the construction of chip plants, whose value is estimated at 24,000 million dollars.

In October, the department issued new export controls to block China’s access to certain semiconductor chips made anywhere in the world using US equipment, vastly expanding its reach as it tries to curb Beijing’s technological and military advances.

The rules build on restrictions sent last year in letters to manufacturers KLA Corp, Lam Research Corp and Applied Materials Inc, effectively requiring them to stop shipments of equipment to wholly Chinese-owned factories that produce advanced logic chips.