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• Companies winning funding cannot engage in significant transactions with China for 10 years
The US Commerce Department said that it will limit the size of government subsidies for semiconductor manufacturing and will not let firms use funding to “pad their bottom line,” reported Reuters.
The US House passed the bipartisan legislation that would provide subsidies for the production of semiconductor chips, on Thursday. The bill will pave the way for providing nearly $280 billion in various incentives for US-based chip making and boost competitiveness with China by allocating billions of dollars toward domestic semiconductor manufacturing and science research.
On Friday, the Commerce Department told chips companies awards will be "no larger than is necessary to ensure the project happens here in the United States “and added it will discourage "race-to-the-bottom subsidy competitions between states and localities.”
Companies winning funding will be prohibited for 10 years “from engaging in significant transactions in China or other countries of concern involving any leading-edge semiconductor manufacturing capacity or material expansions of legacy semiconductor manufacturing capacity designed to export to the US and other countries.”
Source - Reuters
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