The Chip EQUIP Act prohibits companies receiving federal funding for semiconductor manufacturing from purchasing certain advanced manufacturing equipment made or assembled by foreign entities of concern (primarily China) for ten years after signing their federal assistance agreement. The bill targets key equipment used in chip production, including lithography machines, etching tools, inspection systems, and material handling equipment, though it exempts individual parts and components from the restriction. The legislation affects semiconductor manufacturers and fabrication plants that receive federal grants or subsidies under existing chip manufacturing support programs. The Secretary of Commerce can waive these restrictions in limited circumstances—if equivalent equipment isn't available from the U.S. or allied countries, if the equipment was originally made by a trusted country and only later refurbished by a foreign entity of concern, or if national security interests warrant an exception. This bill aims to protect U.S. chip manufacturing competitiveness and security by ensuring federal support doesn't indirectly strengthen foreign competitors' supply chains.
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