Post by : Badri Ariffin

A new bipartisan effort in the U.S. House seeks to curb the purchase of Chinese chipmaking equipment by recipients of CHIPS Act grants for the next decade. The proposed legislation addresses growing concerns over foreign technology’s influence on America’s semiconductor industry.

The bill, introduced by Republican Jay Obernolte and Democrat Zoe Lofgren, targets advanced equipment used in chip manufacturing—from high-end lithography machines made by Dutch firm ASML to devices that cut and process silicon wafers. Similar legislation is expected in the Senate, with Democrat Mark Kelly and Republican Marsha Blackburn planning to present it in December.

The CHIPS Act, passed in 2022 under President Biden, allocated $39 billion to strengthen U.S. chip production. Companies like Intel, Taiwan’s TSMC, and South Korea’s Samsung Electronics have benefited from these grants. However, concerns have arisen as some recipients considered using the funds to acquire Chinese equipment, potentially undermining U.S. technology leadership.

China has invested over $40 billion in its semiconductor sector, boosting its market share in chipmaking tools. U.S. equipment manufacturers, including Applied Materials, Lam Research, and KLA, have voiced worries that export restrictions and competition from Chinese tools could reduce sales and slow domestic research and development.

The legislation does not only focus on China; it also restricts equipment from nations of concern such as Iran, Russia, and North Korea. At the same time, it allows for waivers if essential tools are unavailable in the U.S. or allied countries. Import restrictions would apply only within the U.S., leaving foreign operations of grant recipients unaffected.

The move reflects a broader push to secure critical technology supply chains and ensure that U.S. investments in semiconductor manufacturing directly support domestic innovation.

#Business News