Chipmakers hoping to faucet into the Biden administration’s $39 billion semiconductor manufacturing subsidy program might want to signal agreements promising they received’t increase manufacturing capability in China. The requirement was amongst a handful of funding circumstances the US Commerce Division outlined this week after it might start accepting functions for cash from the CHIPS Act in late June. Congress the $280 billion measure final July in a uncommon present of bipartisan cooperation and put aside $52 billion in tax credit and funding for US semiconductor companies to increase home manufacturing.

“Recipients might be required to enter into an settlement proscribing their capability to increase semiconductor manufacturing capability in overseas international locations of concern for a interval of 10 years after taking the cash,” Commerce Secretary Gina Raimondo advised reporters, per the . Raimondo didn’t identify China by identify. Nevertheless, the superpower is among the many nations the US authorities considers a “overseas nation of concern.”

Moreover, Raimondo stated CHIPS Act recipients can’t “knowingly interact in any joint analysis or know-how licensing effort with a overseas entity of concern that includes delicate applied sciences or merchandise,” a requirement possible designed to discourage home companies from signing agreements just like the one Ford not too long ago .

“I additionally need to be clear that no CHIPS {dollars} may be spent on inventory buybacks,” Raimondo stated. “That is about investing in our nationwide safety, not enabling these corporations to make use of our cash to extend their income.” The Commerce Division may also require corporations making use of for greater than $150 million to stipulate how they plan to supply reasonably priced childcare to staff, a funding situation Raimondo stated displays the present labor market. In some situations, the company could require those self same recipients to return a few of the cash they obtain from the CHIPS Act to the federal government in the event that they generate extra income.