US bans ‘advanced tech’ firms from building facilities in China for a decade

US technology firms that receive government funding will be banned from building “advanced technology facilities” in China for a decade, the Biden administration has announced, as it outlined plans to increase domestic production of semiconductors.

The requirements come under the US government’s near-$53bn (£46bn) plan to scale up manufacturing of semiconductor chips – the “brain” in every electronic device from cars to household appliances – which are predominantly produced in Asia.

The US Chips and Science Act (Chips), approved by Congress in August, is part of the American response to a long-running technological dispute between Washington and Beijing, as US firms demand more government support to reduce reliance on components produced in Chinese factories.

The US Department of Commerce said it hoped to begin seeking applications by next February for $39bn in government semiconductor subsidies to build new production facilities in the US. The plan will also give a 25% investment tax credit for chip plants, where construction begins from 2023.

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