Key Points
- A bipartisan bill has been introduced in the U.S. House to block CHIPS Act grant recipients from purchasing Chinese chipmaking equipment.
- The ban would last for 10 years and targets a wide range of chip manufacturing tools.
- The move is aimed at protecting the U.S. chip industry from growing Chinese competition.
- U.S. chip equipment makers are concerned about losing market share and R&D funding due to Chinese competition and U.S. export controls.
A bipartisan group of U.S. lawmakers introduced a bill in the House on Thursday that would block companies that receive CHIPS Act grants from buying Chinese chipmaking equipment for 10 years.
The proposed bill targets a wide range of chipmaking tools, from complex lithography equipment to the machines that slice and dice silicon wafers.
The bill was introduced in the House by Republican Jay Obernolte and Democrat Zoe Lofgren. A similar bill is planned for the Senate in December, introduced by Democrat Mark Kelly and Republican Marsha Blackburn.
The CHIPS Act, which was passed in 2022, was designed to boost the U.S. chip manufacturing industry. It allocated $39 billion to help build new factories and expand existing ones. Major chip manufacturers such as Intel, TSMC, and Samsung have received grants under this law.
The lawmakers behind the new bill are concerned about China’s growing presence in the chipmaking equipment market. China has invested over $40 billion in this sector, and the Chinese equipment market share has been growing.
At the same time, U.S. chip equipment makers are worried that export restrictions on their tools to China will hurt their sales and ability to invest in research and development. The fact that CHIPS Act grant money could be used to buy Chinese equipment has added to these concerns.
While the main target of the legislation is Chinese equipment, the bill also blocks tools from other countries of concern, including Iran, Russia, and North Korea. There are some exceptions in the bill, such as allowing the U.S. to grant waivers if specific tools are not produced in the U.S. or by its allied countries.
The bill would only block imports into the U.S. and would not affect the foreign operations of companies that have received CHIPS Act grants.
