WASHINGTON — The U.S. Department of Commerce today released the final rule implementing the national security guardrails of the bipartisan CHIPS and Science Act. The rule elaborates on two core provisions of the statute: the first, prohibiting CHIPS funds recipients from expanding material semiconductor manufacturing capacity in foreign countries of concern for ten years; and the second, restricting recipients from certain joint research or technology licensing efforts with foreign entities of concern.
The rule will help ensure CHIPS investments enhance global supply chain resilience in coordination with allies and partners. The CHIPS and Science Act is part of President Biden’s Investing in America agenda for unleashing a manufacturing and innovation boom, driving U.S. competitiveness, and strengthening economic and national security.
This final rule follows careful consideration of comments submitted in response to the proposed rule, which was published in March 2023. The Department reviewed and incorporated suggestions from stakeholders, including representatives of the domestic and foreign semiconductor industry, academia, labor organizations, trade associations, and others in developing this rule. The rule offers details and definitions on national security measures applicable to the CHIPS Incentives Program, including limiting funding recipients from expanding semiconductor manufacturing in foreign countries of concern.
“One of the Biden-Harris Administration’s top priorities – made possible by the CHIPS and Science Act – is to expand the technological leadership of the U.S. and our allies and partners. These guardrails will protect our national security and help the United States stay ahead for decades to come,” said Secretary of Commerce Gina Raimondo. “CHIPS for America is fundamentally a national security initiative and these guardrails will help ensure companies receiving U.S. Government funds do not undermine our national security as we continue to coordinate with our allies and partners to strengthen global supply chains and enhance our collective security.”
The bipartisan CHIPS and Science Act included clear guardrails to strengthen national security. The statute:
Today’s final rule provides details on and definitions for these national security guardrails. In particular, the rule:
International Coordination with U.S Partners and Allies
The Department appreciates the extensive input and cooperation from U.S. partners and allies while developing this rule. The Department will continue coordinating with international allies and partners to support a healthy global semiconductor ecosystem that drives innovation and is resilient to cybersecurity threats, natural disasters, pandemics, geopolitical conflict, and more. As semiconductors and technologies continue to evolve, the United States will work with allies and partners and develop coordinated strategies to protect our collective economic and national security.
As the Department has been implementing the CHIPS and Science Act, it has remained in close contact with U.S. partners and allies, including through engagements with the Republic of Korea, Japan, India, and the United Kingdom, and through the Indo-Pacific Economic Framework, European Union-United States Trade and Technology Council, and North American Semiconductor Conference. The Department will continue coordinating closely with U.S. partners and allies to advance these shared goals, advance our collective security, and strengthen global supply chains.
About CHIPS for America
CHIPS for America is part of President Biden’s economic plan to invest in America, stimulate private sector investment, create good-paying jobs, make more in the United States, and revitalize communities left behind. CHIPS for America includes the CHIPS Program Office, responsible for manufacturing incentives, and the CHIPS Research and Development Office, responsible for R&D programs, that both sit within the National Institute of Standards and Technology (NIST) at the Department of Commerce. NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. NIST is uniquely positioned to successfully administer the CHIPS for America program because of the bureau’s strong relationships with U.S. industries, its deep understanding of the semiconductor ecosystem, and its reputation as fair and trusted. Visit https://www.chips.gov to learn more.