Sponsors (3)
Introduced December 2, 2025 by Mark Edward Kelly · Last progress December 2, 2025
The bill strengthens national security and incentives for domestic semiconductor supply chains by restricting certain foreign-made finished equipment, but at the cost of higher short-term project costs, slower access to advanced tools, and greater compliance and approval delays for grant recipients.
U.S. semiconductor manufacturers and related supply chains are less likely to acquire finished equipment from hostile foreign firms, reducing the risk of embedded supply‑chain vulnerabilities.
The rule encourages domestic and allied suppliers, which can boost onshore production and create jobs in semiconductor manufacturing and equipment sectors.
Clarifying which equipment types are covered (e.g., lithography, etching, inspection) gives grant recipients clearer rules and reduces legal uncertainty about compliance.
Recipients of federal awards (state programs, small businesses, research projects) may face higher costs or delays because excluded foreign equipment may be cheaper or the only immediate option, increasing taxpayer and grantee expenses.
A 10-year ban on finished equipment from excluded suppliers can limit rapid access to advanced tools, slowing production and R&D while U.S. and allied supply chains mature.
New compliance requirements (verifying equipment source and refurbishment history), narrow waiver criteria, and required consultations with intelligence/defense officials increase administrative costs and legal risk and can slow approvals, interrupting projects.
Based on analysis of 2 sections of legislative text.
Defines 'ineligible' finished semiconductor equipment, lists covered equipment types, and requires a 10-year ban on their procurement/use for federal awardees with only narrow waivers.
Adds detailed definitions of “completed, fully assembled” and “ineligible” semiconductor manufacturing equipment, lists the specific types of covered equipment, and excludes parts/subcomponents from that definition. Requires that agreements and awards under the existing federal semiconductor incentive program include a 10-year ban on procuring, installing, or using such ineligible equipment, with only limited, narrowly defined waiver authority. Waivers are allowed only when U.S. or allied sources cannot meet quality/quantity needs, when equipment was originally made by an approved manufacturer and later refurbished by a foreign entity of concern, or when the equipment meets export rules and a national-security review by the Secretary after consulting the Director of National Intelligence or the Secretary of Defense finds the waiver serves U.S. security interests. The law preserves a separate statutory safeguard provision that may not be waived.