A bipartisan group of U.S. lawmakers unveiled a bill in the House on Thursday that would restrict the purchase of Chinese chipmaking equipment by CHIPS Act grant recipients for 10 years, Reuters reported.
The bill targets a range of chipmaking equipment, from complex lithography systems, such as those made by ASML (ASML), to machines that slice silicon wafers on which chips are printed, the report added.
The bill was introduced in the House by Republican Jay Obernolte and Democratic member Zoe Lofgren. In December, Democrat Mark Kelly and Republican Marsha Blackburn plan to introduce the bill in the Senate, according to the report.
The CHIPS Act was brought under the Biden administration in 2022 and was aimed at boosting the U.S. chip manufacturing industry, and allocated $39B to spur the construction of new factories and expand existing facilities.
Chip makers like Taiwan Semiconductor Manufacturing (TSM), and South Korea’s Samsung Electronics (OTCPK:SSNLF) have received grants under the Act. Intel (INTC) also received a grant, but the Trump administration is taking an equity stake in the company.
China has invested over $40B in the chip industry with a focus on manufacturing equipment. The market share of such equipment has grown substantially, as per background material provided by the lawmakers, the report added.
Among the largest U.S. chipmaking tool companies are — Applied Materials (AMAT), Lam Research (LRCX), and KLA (KLAC).
The bill also restricts tools from other nations of concern, such as Iran, Russia and North Korea.
There are exceptions in the bill that include the ability for the U.S. to grant waivers if specific tools are not made in the U.S. or by its allied countries.
The bill would only block imports to the U.S. and would not impact the foreign operations of CHIPS Act grant recipients.