A bipartisan group of U.S. lawmakers introduced legislation on Thursday that would prohibit recipients of CHIPS Act grants from purchasing Chinese chipmaking equipment for the next decade. The measure also targets advanced tools from other countries of concern, including Iran, Russia, and North Korea, while providing exceptions for critical machinery not produced domestically or by allied nations.
The bill, filed in the House by Republican Jay Obernolte and Democrat Zoe Lofgren, focuses on a broad range of semiconductor manufacturing equipment—from complex lithography systems, such as those produced by Dutch company ASML, to wafer-slicing and processing machinery. Senators Mark Kelly (D) and Marsha Blackburn (R) plan to introduce a companion measure in the Senate in December.
The legislation comes in the context of the 2022 CHIPS Act, which allocated $39 billion to expand U.S. semiconductor manufacturing capacity. Major chipmakers including Intel, Taiwan’s TSMC, and South Korea’s Samsung Electronics have received grants under the law, with Intel’s funding later converted into a U.S. equity stake.
Lawmakers cited China’s more than $40 billion investment in semiconductor equipment as a concern, arguing that purchases of foreign tools using CHIPS Act funds could undermine U.S. technological leadership. Domestic chip equipment manufacturers—such as Applied Materials, Lam Research, and KLA—have expressed worries that export restrictions and competition from Chinese tools may limit sales and reduce investment in research and development.
Under the bill, the restrictions would only apply to imports used within the U.S. and would not impact the foreign operations of grant recipients. Provisions for waivers would allow the U.S. to grant exceptions if certain tools are not available from domestic or allied suppliers.
Supporters say the measure strengthens national security and reinforces the original intent of the CHIPS Act to develop a robust domestic semiconductor ecosystem, while critics may view it as adding additional regulatory constraints to an already complex industry.