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Tech war: proposed US ‘guardrails’ on new chip investment in China to block TSMC, Samsung expansion plans on mainland
The proposed guidelines bar companies receiving US Chips and Science Act subsidies from using the funds for projects in China, Russia, Iran and North KoreaThe new rules threaten to block major chip makers such as TSMC, Samsung and SK Hynix from expanding their existing production facilities in China
Some of the world’s leading chip makers, including Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics, will be hamstrung from expanding their facilities in China under proposed US guidelines covering companies that receive federal funding for semiconductor production, according to analysts.
The proposed “national security guardrails”, which the US Commerce Department unveiled on Tuesday, bar companies receiving a portion of the US$52 billion in federal subsidies under the US Chips and Science Act from using the funds for projects in “foreign countries of concern” – specifically, mainland China, Russia, Iran and North Korea.
The new guidelines, which classify a list of semiconductors as critical to national security, prohibit funding recipients from adding new production lines or expanding an existing legacy facility’s production capacity beyond 10 per cent.
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