Bipartisan groups of lawmakers in the House and Senate have introduced legislation that would prevent winners of CHIPS and Science Act funding from using that money to buy equipment and specialized manufacturing tools from companies based in China or other countries judged to be adversaries of the United States including Russia, North Korea, and Iran.
The Chip Equipment Quality, Usefulness, and Integrity Protection Act of 2024 (Chip EQUIP Act) was introduced in the House by Reps. Zoe Lofgren, D-Calif., and Frank Lucas, R-Okla., and in the Senate by Sens. Mark Kelly, D-Ariz., and Marsha Blackburn, R-Tenn.
President Biden signed the CHIPS and Science Act into law in August 2022, making up to $52 billion of funding available to incentivize semiconductor makers to establish new manufacturing operations in the United States. Since then, the Commerce Department has announced CHIPS and Science Act preliminary funding deals with several firms worth more than $26 billion – with most of those going to support the creation of new semiconductor making capacity in the U.S.
“China currently trails the U.S. in the manufacturing of advanced semiconductor tools, but it has engaged in a sustained effort to invest in developing their own advanced tools and to scale up their production capability of ‘legacy’ tools, which are not affected by export controls, like the one the U.S. imposed in 2022,” according to a statement from the senators’ offices when they introduced their version of the bill on June 18.
“If left unchecked, Chinese state subsidies and aggressive market tactics could lead Chinese-made legacy tools to be placed in manufacturing facilities in the U.S. and allied nations in the future,” their offices said.
“Having a strong domestic semiconductor industry is critical to our economic success and our national security. The Chinese Communist Party has a stranglehold on these markets, and it’s imperative that we catch up,” said Rep Lucas.
“The Chip EQUIP Act picks up where CHIPS and Science left off and prohibits CHIPS-funded projects from buying Chinese semiconductor manufacturing equipment and tooling. It will strengthen our competitiveness, protect us from intellectual property theft, and ensure taxpayer dollars are being used effectively,” the House member added.
“As the United States revitalizes its domestic semiconductor manufacturing industry, we must do everything in our power to stop China and other foreign entities of concern from compromising our microchip manufacturing facilities,” said Senator Kelly. “The Chip EQUIP Act will strengthen our national security and ensure that America’s advanced semiconductor tools remain the world’s best.”
