US officials are tightening the ground rules for semiconductor subsidies, signaling that companies receiving state support must avoid linking investments to growth plans in China and Russia. This stance is communicated through a document from the US Department of Commerce that was reported by the news agency RIA Novosti.
The document accompanies the Chips for America Act, a broad policy package approved recently that delivers more than 52 billion dollars in funding to strengthen domestic chip manufacturing and research. The added requirements aim to ensure that subsidy recipients maintain clear boundaries between their supported operations at home and any strategic initiatives abroad that could influence global supply chains.
According to the document, the law prohibits significant actions linked to expanding production capacity at advanced or modern facilities in foreign countries for a decade from the moment a grant is received. This ten-year restraint is presented as a guardrail designed to prevent rapid overseas expansion that could undermine national security and economic resilience. The emphasis is on ensuring that public investment yields domestic manufacturing benefits and does not translate into broader foreign commitments that could be leveraged by competitors or adversaries.
The Commerce Department identifies a set of countries of concern, which includes China, Russia, Iran, and North Korea. In practical terms, certain transfers or business activities that amount to significant transactions are scrutinized for potential ties to expansion beyond US borders. A threshold is noted where transactions valued at one hundred thousand dollars could count as a significant expansion if they drive a noticeable increase in production capacity, typically defined as a five percent rise. The framework thus signals a careful balance between providing government support for American chip makers and maintaining strict oversight of overseas engineering, procurement, and manufacturing arrangements that could affect national security interests.
Industry observers point to several consequences for the broader semiconductor ecosystem. First, the clarified language helps set expectations for how grant recipients plan capital investments and supply chain partnerships. Second, it underscores Washington’s intent to keep critical technology development anchored in the United States while preserving the flexibility to address urgent security concerns that arise as foreign policy conditions shift. Third, the rules create a measurable benchmark—ten-year periods and a five percent production threshold—that can guide due diligence, audits, and enforcement actions in the future. These elements are intended to deter a passive drift toward overseas capacity growth and to preserve domestic leadership in advanced manufacturing technologies.
From a strategic perspective, the policy signals a clear stance on the coupling of federal assistance with national defense considerations. The focus on preventing significant foreign expansion reflects worries about dependency on foreign suppliers for essential components, potential political leverage, and the risk of technology leakage. Stakeholders within the industry are urged to align their planning processes with the new requirements, performing rigorous internal reviews of project scopes, supplier agreements, and joint ventures to confirm that no component of funded activities indirectly facilitates expansion in restricted jurisdictions. At the same time, the policy remains open to legitimate collaborations that do not threaten the intent of the program or raise national security concerns, as long as they are properly disclosed and approved by the relevant authorities. This approach seeks to harmonize corporate innovation with public accountability, a balance that has become increasingly central to the governance of critical technologies in North America.