US Finalizes 5% Production Increase Limit for Semiconductor Companies in China

[Image source=UPI Yonhap News]

The U.S. Biden administration has made a final decision to maintain the scope within which companies receiving subsidies under the Semiconductor Act can expand semiconductor production capacity in China at the existing level of around 5%.

On the 22nd (local time), Bloomberg News reported that the U.S. Department of Commerce released the final version of the Semiconductor Act guardrail regulations reflecting this content.

According to the regulation, companies that receive subsidies must return the full amount of the subsidy if they engage in significant transactions that 'substantially expand' semiconductor production capacity in China or other concerned countries over the next 10 years.

The substantial expansion specified in this regulation is defined as 5% or more for advanced semiconductors and 10% or more for previous-generation general-purpose semiconductors.

Earlier, in March, the Korean government had requested the U.S. Department of Commerce to double the standard for substantial expansion of advanced semiconductors, which was fixed at 5% in the initial draft of the Semiconductor Act guardrail provisions.

This content was produced with the assistance of AI translation services.