The Biden administration has announced that U.S. technology companies that receive federal funding will be banned from building factories and research facilities in China for the next 10 years.
The new guidelines are part of a $50 billion U.S. plan aimed at bolstering America’s semiconductor industry, and comes amid political calls to reduce reliance on China for various technologies and manufacturing capabilities.
The new ban is also viewed as the latest escalation in the long running trade and technology battle between the U.S. and China.
Earlier this month, microchip and semiconductor makers Nvidia (NVDA) and Advanced Micro Devices (AMD) were told by the U.S. government to stop the sale of artificial intelligence chips to China.
In August of this year, U.S. President Joe Biden signed into law a commitment to invest $280 billion U.S. in high-tech manufacturing and scientific research amid growing concerns that the U.S. is losing ground to China.
The investments include tax breaks for companies that build computer chip manufacturing plants and research facilities within the United States.
America currently produces 10% of the global supply of semiconductors, which are used in everything from cars to smartphones, down from 40% in 1990.
The Chinese government has criticized the U.S. semiconductor bill, referring to it as “Cold War mentality.”
