U.S. says it will limit size of semiconductor chips grants

By David Shepardson

WASHINGTON (Reuters) – The U.S. Commerce Division stated late on Friday it’ll restrict the scale of presidency subsidizes for semiconductor manufacturing and won’t let corporations use funding to “pad their backside line.”

On Thursday, the U.S. Home of Representatives gave remaining approval to laws that gives $52 billion in authorities funding to spice up semiconductor manufacturing and analysis. President Joe Biden is anticipated to signal the laws early subsequent week.

The Commerce Division Friday advised chips corporations awards might be “no bigger than is important to make sure the undertaking occurs right here in the USA” and added it’ll discourage “race-to-the-bottom subsidy competitions between states and localities.”

Congressional Progressive Caucus chair Pramila Jayapal stated the group backed the laws after prolonged negotiations with Commerce Secretary Gina Raimondo after the group expressed considerations chips corporations would use funding for inventory buybacks or pay dividends.

A caucus spokeswoman stated Friday “progressives had been capable of vote for the invoice yesterday, assured that the division could be guaranteeing the funding couldn’t be used for company self-enrichment.”

Commerce stated candidates should provide detailed monetary data and projections for proposed tasks and capital funding plans: “The division will go over these with a fine-tooth comb and make it possible for corporations usually are not padding their fashions to ask for outsized incentives.”

A Commerce Division spokesperson declined to remark past the net posting.

The division vowed to “give desire in awards to corporations who decide to make future investments that develop the home semiconductor trade … and never have interaction in inventory buybacks.”

The laws doesn’t prohibit inventory buybacks by corporations receiving authorities funding however does prohibit using grant funds for the buybacks.

Corporations successful funding might be prohibited for 10 years “from partaking in vital transactions in China or different nations of concern involving any modern semiconductor manufacturing capability or materials expansions of legacy semiconductor manufacturing capability designed to export to the U.S. and different nations.”

(Reporting by David Shepardson; Enhancing by Chris Reese)