It’s the last regulatory hurdle before the Commerce Department hands out more than $100 billion worth of federal aid intended to boost domestic chipmaking while containing China’s technological advancement.
However, the Commerce Department removed a stringent curb in the initially proposed terms. Previously, the agency included a $100,000 spending cap on investments in advanced capacity in China, which would effectively prevent companies getting federal funding to grow output for chips more advanced than 28nm at all.
At the same time, the Commerce Department expanded the final rule to limit the buildout scale of chipmakers’ facilities in China, in addition to original restrictions that are based only on production capacity. The curb is the binding constraint of the national security guardrails, according to the Commerce official.
Critics are concerned that allowing firms winning federal grants to continue to grow capacity in China may help the Asian nation bulk up its muscle in the race against the US for tech supremacy.