The U.S. House of Representatives on Thursday gave final approval to legislation that would provide $52 billion in government funding to boost semiconductor manufacturing and research. President Joe Biden is expected to sign the legislation early next week.
The Commerce Department told chip companies on Friday that “the program will not exceed what is necessary to ensure its implementation in the United States” and that it is “a race-to-bottom grant competition.” Between States and Municipalities”
Pramila Jayapal, chairwoman of the Congressional Progressive Caucus, said the group supported the legislation after lengthy negotiations with Commerce Secretary Gina Raimondo after the group raised concerns that chip shop companies would buy back shares or pay dividends.
A party spokesman said Friday that “progressives can vote in favor of the bill yesterday, hoping the department will ensure that the funds cannot be used for corporate self-enrichment.”
Commerce said applicants must provide detailed financial information and forecasts for proposed projects and capital investment plans: “The Department will go through these with a fine-toothed comb to ensure companies do not ask for excessive incentives in their models.”
A spokeswoman for the Commerce Department declined to comment outside the webcast.
“The department promised to give preference to companies that are committed to making future investments that will grow the domestic semiconductor industry … and will not engage in share buybacks”.
The law does not prohibit the purchase of shares in government-backed companies, but it does prohibit the use of grant funds to purchase shares.
Companies receiving the subsidies are barred for 10 years from entering “significant transactions in China or other high-risk countries involving advanced semiconductor manufacturing capacity or major expansions of semiconductor manufacturing capacity destined for export to the United States and other countries.”
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