Recipients of CHIPS incentive funds are required to comply with the national security guardrails set forth in the final rule from the Department of Commerce.
Of note, the statute:
- Prohibits recipients of CHIPS incentives funds from using the funds to construct, modify, or improve a semiconductor facility outside of the United States;
- Restricts recipients of CHIPS incentives funds from investing in most semiconductor manufacturing in foreign countries of concern for 10 years after the date of award; and
- Limits recipients of CHIPS incentives funds from engaging in joint research or technology licensing efforts with a foreign entity of concern that relates to a technology or product that raises national security concerns.
A foreign entity of concern includes any foreign entity or person that is:
- On a restricted party list;
- Owned by, controlled by, located in, or subject to the jurisdiction of North Korea, the Peoples Republic of China (includes Hong Kong and Macau), Russia, or Iran; or
- A person that is a citizen, national or resident of one of the countries listed above AND is located in one of the countries listed above.
A "technology or product that raises national security concerns" means:
- Any semiconductor critical to national security (as further defined in the statute); or
- Any item listed in Category 3 of the Commerce Control List that is controlled for National Security or Regional Stability reasons.