US lawmakers target Chinese chipmaking equipment imports by Chips Act grant recipients

The bill targets a range of chipmaking tools from complex lithography equipment to machines that slice and dice the silicon wafers on which chips are printed

A bipartisan group of US lawmakers introduced a bill on Thursday (Nov 20) in the House that would block the purchase of Chinese chipmaking equipment by Chips Act grant recipients for 10 years.

The bill targets a range of chipmaking tools from complex lithography equipment, like that produced by Dutch manufacturer ASML, to machines that slice and dice the silicon wafers on which chips are printed. The bill was introduced in the House by Republican Jay Obernolte and Democratic member Zoe Lofgren. In the Senate, Democrat Mark Kelly and Republican Marsha Blackburn plan to introduce the bill in December.

Passed under the Biden administration in 2022, the Chips Act was designed to boost the US chip manufacturing industry and allocated US$39 billion to spur the construction of new factories and expand existing facilities.

Chip manufacturers such as Intel, Taiwan’s TSMC and South Korea’s Samsung Electronics have received grants under the law, though the US later converted Intel’s grant money into an equity stake.

China has invested more than US$40 billion in the chip industry with a focus on manufacturing equipment, and the market share of such equipment has grown substantially, according to background material provided by the lawmakers.

US chip equipment makers have grown concerned that export restrictions on their tool shipments to China will lower sales and hurt their ability to invest in research and development. The use of Chips Act grant money to buy Chinese equipment has compounded the issue.

The largest American chipmaking tool companies include Applied Materials, Lam Research and KLA .

Though Chinese equipment is the main target of the legislation, the bill also blocks tools from other nations of concern such as Iran, Russia and North Korea.

There are exceptions carved out in the bill that include the ability for the US to grant waivers if specific tools are not produced in the US or by its allied countries.

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The bill would only block imports to the US and would not affect the foreign operations of Chips Act grant recipients. REUTERS

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