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Biden Admin Bans US ‘Advanced Tech’ Firms From Building Facilities in China for Next Decade

Published: September 7, 2022
US Secretary of Commerce Gina Raimondo speaks during the daily briefing in the James S Brady Press Briefing Room of the White House in Washington, DC, on Sept. 6, 2022. (Image: MANDEL NGAN/AFP via Getty Images)

American based technology firms that receive U.S. government funding will be barred from building “advanced technology facilities” in China for the next decade, according to a recent announcement by the Biden administration.

The ban is a requirement under the U.S. government’s multi-billion dollar plan to produce semiconductor chips on American soil, components that are predominantly manufactured in Asia. 

In August, Congress passed the Chips and Science Act (Chips) as part of its response to a drawn out technological dispute between Washington and Beijing.

According to the U.S. Department of Commerce, beginning in February 2023, the department hopes to begin receiving applications for approximately $39 billion in subsidies to build new semiconductor production facilities on U.S. soil. The plan includes a 25 percent investment tax credit for chip plants, if construction begins in 2023.

Gina Raimondo, U.S. commerce secretary, said, “We’re also going to be implementing the guardrails to ensure those who receive Chips funds cannot compromise national security. They’re not allowed to use this money to invest in China; they can’t develop leading-edge technologies in China; they can’t send latest technology overseas.”


Currently, the bulk of the planet’s semiconductors are manufactured in Taiwan or South Korea, while the U.S. currently produces about 10 percent of the world’s supply. 

The planet is still reeling under a semiconductor shortage, spawned by the COVID-19 pandemic, which has impacted the manufacturing of everything from vehicles to small personal electronics. 

“These funds are intended to help companies maximise the scale of their projects. We’re going to be pushing companies to go bigger and be bolder,” Raimondo said, adding that, “We’re going to negotiate these deals one at a time,” saying that companies will need to “prove to us the money is absolutely necessary to make these investments.”

China’s embassy in Washington came out in opposition to the Chips bill, referring to it as reminiscent of a “Cold War mentality.”

Earlier this month the Biden administration also banned the export of two advanced chips to China, causing producer Nvidia’s stock to tumble. 

The Nvidia and AMD chips targeted by Washington are primarily used for artificial intelligence (AI) and machine learning applications. However, the models banned can also be useful for militaries in modeling bomb simulations and designing weapons.

China has invested billions in its domestic chip making industry for several years but has failed to produce chips that can compete on the world market. 

However, following the announcement of the ban, shares in several Chinese technology firms surged, including Hygon Information Technology Co and Loongson Technology Corp, rising 10 percent and six percent respectively.