United States of America

United States of America

Restricts outward FDI in semiconductors in select countries

09 Aug 2022

On 9 August 2022, the President of the United States signed into law the CHIPS and Science Act which intends to boost investments in critical and emerging technologies (as described here: https://investmentpolicy.unctad.org/investment-policy-monitor/measures/4005/united-states-of-america-new-law-to-boost-investments-in-critical-and-emerging-technologies)

Under the CHIPS Act, any semiconductor company that would receive financial assistance from the Federal Government is required to enter in an agreement with the Secretary of Commerce and "may not engage in any significant transaction" involving the material expansion of semiconductor capacity in China or any other foreign "country of concern" for 10 years (including the Islamic Republic of Iran, the Democratic People's Republic of Korea and the Russian Federation).

During this period of 10 years, companies receiving subsidies will be required to notify the Secretary of Commerce of any transaction in China or other "countries of concern".