Recipients of CHIPS incentive funds are required to comply with regulations when engaging with “foreign entities of concern.” We are watching this evolving area closely. For now, all collaborations with entities or individuals located in China, Russia, Iran, and North Korea must be reviewed by the research security office.
Additional Detail
National security guardrails are set forth in the final rule from the Department of Commerce. Of note, the statute:
- Prohibits recipients of CHIPS incentives funds from using the funds to construct, modify, or improve a semiconductor facility outside of the United States;
- Restricts recipients of CHIPS incentives funds from investing in most semiconductor manufacturing in foreign countries of concern for 10 years after the date of award; and
- Limits recipients of CHIPS incentives funds from engaging in joint research or technology licensing efforts with a foreign entity of concern that relates to a technology or product that raises national security concerns.
A foreign entity of concern includes any foreign entity or person that is:
- On a restricted party list;
- Owned by, controlled by, located in, or subject to the jurisdiction of North Korea, the Peoples Republic of China (includes Hong Kong and Macau), Russia, or Iran; or
- A person that is a citizen, national or resident of one of the countries listed above AND is located in one of the countries listed above.
A "technology or product that raises national security concerns" means:
- Any semiconductor critical to national security (as further defined in the statute); or
- Any item listed in Category 3 of the Commerce Control List that is controlled for National Security or Regional Stability reasons.