The proposed guardrails are intended to ensure that technology and innovation funded by the CHIPS and Science Act are not used for malign purposes by adversarial countries against the United States or its allies and partners. The proposed rule outlines additional details and definitions for these national security guardrails, including establishing standards to restrict advanced facility expansion in foreign countries of concern, limiting the expansion of legacy facilities in foreign countries of concern, classifying certain semiconductors as critical to national security, and reinforcing U.S. export controls. The department is seeking public comment on the Notice of Proposed Rulemaking.
For all manufacturers, appropriately non-US display manufacturers, the proposed guardrails limit recipients of funding from investing in the expansion of semiconductor manufacturing in foreign countries of concern, which are identified as the People’s Republic of China (PRC), Russia, Iran, and North Korea. This may impact the ability of non-US display manufacturers to expand their semiconductor manufacturing operations in these countries if they receive funding from the CHIPS Incentives Program. Additionally, the proposed rule establishes standards to restrict advanced facility expansion and limits the expansion of legacy facilities in these countries, which seems like a big deal. There are plenty of words to read through with your lawyers present, of course, on the official CHIPS Act resources page.
That’s summarized from the last missive from the Commerce Department, published last week. Maybe the language has always been there, or maybe I should read government documents in my leisure time, but it seems like we are in for a heck of a ride. So much money, and so much vested in the outcome. This is uncharted territory to some extent because the US has never had as powerful an industrial adversary as China. Japan and Germany certainly gave the country a fright in the 70s and 80s with their post-war economies hitting peak power, but they were not considered adversarial, just a little ungrateful with a hint of the usual xenophobia thrown in to spice things up. At least Japan gave back with the Nakatomi Plaza and one of the greatest Christmas movies of all time. Germany only managed a paltry 99 balloons, but South Korea, to be fair, has bought itself a lot of time by banking on BTS and its invincible army.
