US bans tech firms from building facilities in China
The Biden administration has announced that US technology firms that receive government funding will be banned from building “advanced technology facilities” in China for 10 years.
The development comes under the US government’s near-$53 billion plan to scale up manufacturing of semiconductor chips which are predominantly produced in Asia. The US currently only produces about 10% of the world’s supply of semiconductors, most chips are manufactured in Taiwan and South Korea.
The US Chips and Science Act (Chips) is part of the American response to a long-running technological dispute between Washington and Beijing, as US firms demand more government support to reduce reliance on components produced in Chinese factories.
US commerce secretary Gina Raimondo, 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 the latest technology overseas.”
The global shortages of computer chips have caused large production delays for carmakers in the UK and beyond, as well as for technology companies and other manufacturers. The Chips Act commits a total of $280bn to hi-tech manufacturing and research, and is designed to increase the US’s competitiveness with China.
In addition, the industry has gained increased geopolitical prominence as China has begun asserting itself on the world stage under its president, Xi Jinping, including threatening Taiwan. This has led to investment in and expansion of semiconductor production in the US, as well as in Japan and the EU.
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