US Bans Advanced Tech Companies to Build Facilities in China

News TECHNOLOGY

The government of the United States announced, US technology companies that receive government funding will be banned from building advanced technology facilities in China for a decade, and the US government has outlined plans to increase domestic production of semiconductors.

These requirements come under the 53 billion dollars plan of the US government to scale up manufacturing of semiconductor chips, which are predominantly produced in Asia. The US Chips and Science Act, is part of the American response to a long-running technological dispute between Beijing and Washington, as the US companies demand more government support to decrease their reliance on components produced in Chinese factories.

The US Department of Commerce said it hopes to start seeking applications by February 2023 for 39 billion dollars in government semiconductor subsidies to develop new production facilities in the United States. This plan will give a 25 percent investment tax credit for chip plants, where construction starts from 2023.

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Gina Raimondo, the US commerce secretary, said that they are going to implement the guardrails to ensure that those who receive semiconductor chip funds cannot compromise national security. Gina Raimondo added that the receivers are not allowed to use this money to invest in China, and they also cannot develop leading-edge technologies in China.