Sponsors (3)
The legislation strengthens national security and bolsters U.S./allied semiconductor manufacturing by forbidding CHIPS-funded projects from using equipment from designated foreign adversaries, but it does so at the cost of higher equipment prices, possible construction/production delays, exclusionary effects on some suppliers, and increased compliance overhead.
CHIPS grant recipients and the U.S. semiconductor supply chain: a 10-year prohibition on installing or using semiconductor equipment from designated foreign adversaries reduces dependence on hostile actors and lowers the risk of foreign compromise in critical fabs.
U.S. and allied equipment makers and workers: by prioritizing domestic and allied sourcing for critical fabrication equipment, the policy is likely to increase demand for U.S./allied suppliers and support domestic manufacturing jobs.
State governments and CHIPS project developers: narrowly tailored waivers are allowed when sufficient quantity/quality of equipment isn’t available domestically or among allies, reducing the risk of project stoppages or capability gaps.
CHIPS fund recipients and taxpayers: restricting approved equipment sources may raise equipment costs and limit supplier competition, increasing project costs and potentially raising program/taxpayer expenses.
Tech workers and state governments building fabs: the 10-year ban could delay facility buildouts or slow production if suitable U.S./ally equipment is unavailable and waiver approval is slow or denied.
Small manufacturers and refurbishers: suppliers or service providers that rely on workforce, parts, or components tied to designated foreign entities may be excluded from CHIPS-funded projects, harming some businesses and jobs.
Based on analysis of 2 sections of legislative text.
Conditions CHIPS Act financial assistance by banning acquisition, installation, or use of specified semiconductor equipment tied to designated foreign entities for 10 years, with limited waivers.
Introduced December 2, 2025 by Mark Edward Kelly · Last progress December 2, 2025
Prohibits recipients of CHIPS Act financial assistance from acquiring, installing, or using certain semiconductor manufacturing equipment made, assembled, or refurbished by a designated “foreign entity of concern” for 10 years after their award, while allowing a narrow set of waivers. It defines which items count as ineligible equipment (listing common classes of chip-making tools) and requires the Department of Commerce to build the prohibition into CHIPS financial-assistance agreements, with specific waiver grounds and a national-security consultation pathway for exceptions.