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For Chip Makers, a Choice Between the U.S. and China Looms

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President Biden signing the Chips Act last year.

Commerce Secretary Gina Raimondo said the Biden administration isn’t seeking to decouple economically from China. “We want American businesses to continue to do business in and with China, and vice versa.”

Credit: mandel ngan/Agence France-Presse/Getty Images

Semiconductor companies seeking federal grants under the Chips Act could face a tough decision: take Washington's help to expand in the U.S., or preserve their ability to expand in China. 

The Biden administration last week proposed new rules detailing restrictions chip companies would face on operations in China and other countries of concern if the companies accept taxpayer funding. 

Some of the proposed restrictions, known as the China guardrails, were tougher than industry executives, lawyers and national-security analysts say they had expected—both for leading-edge semiconductor plants needed for advanced military weapons systems as well as factories making so-called legacy chips used in consumer electronics.

From The Wall Street Journal
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