HR6207-119

What This Bill Does

The Chip EQUIP Act amends the CHIPS Act definitions and award conditions. It defines “completed, fully assembled” semiconductor manufacturing equipment and “ineligible semiconductor manufacturing equipment.” Ineligible equipment is completed, fully assembled equipment manufactured, assembled, or refurbished by a foreign entity of concern or its subsidiary and designed for semiconductor fabrication, assembly, testing, advanced packaging, production, or research and development. The included equipment list covers deposition, etching, lithography, inspection, measuring and test equipment, wafer slicing, wafer dicing, wire bonders, ion implantation, chemical mechanical polishing, diffusion or oxidation furnaces, thermal processing, and automated material handling systems, while excluding parts, chambers, subsystems, or subcomponents incorporated into equipment. The Secretary must include 10-year prohibitions in CHIPS Act section 9902 financial assistance agreements and section 9906 awards against project procurement, installation, or use of ineligible equipment. The Secretary may waive the prohibition if sufficient satisfactory equipment is unavailable from the United States or allied or partner countries, if the equipment was made by a non-foreign-entity-of-concern but refurbished by a foreign entity of concern, or if use complies with Export Administration Regulations and the Secretary, after consulting the Director of National Intelligence or Secretary of Defense, determines the waiver is in the national security interest. The bill does not waive existing section 9907 foreign-entity-of-concern restrictions.

Who Benefits and How

U.S. semiconductor equipment manufacturers benefit because CHIPS-funded projects face restrictions on complete foreign-entity-of-concern equipment. Allied semiconductor equipment manufacturers benefit when domestic or partner-country supply is favored before a waiver can issue. Commerce Department CHIPS Program Office staff benefit from a clearer statutory equipment restriction to include in award agreements. National security reviewers benefit because DNI or Defense consultation is required for certain waivers.

Who Bears the Burden and How

CHIPS Act funding recipients must avoid procuring, installing, or using ineligible semiconductor manufacturing equipment for 10 years after signing assistance agreements. Foreign entities of concern manufacturing semiconductor equipment lose access to federally assisted project procurement. Semiconductor fabs using refurbished equipment from foreign entities of concern must seek waivers or replace equipment. Commerce Department CHIPS Program Office staff must write, monitor, and enforce the 10-year award terms and waiver process. Export-control compliance teams must evaluate whether proposed equipment use meets Export Administration Regulations and national-security waiver conditions.

Key Provisions

• Defines completed and fully assembled semiconductor manufacturing equipment for CHIPS Act purposes.
• Defines ineligible semiconductor manufacturing equipment made, assembled, or refurbished by foreign entities of concern.
• Requires 10-year prohibitions on procuring, installing, or using ineligible equipment in CHIPS-funded projects.
• Authorizes waivers for unavailable domestic or allied supply, certain refurbished equipment, or Export Administration Regulations-compliant national-security cases.
• Requires DNI or Defense consultation before national-security-interest waiver determinations.
• Preserves existing CHIPS Act foreign-entity-of-concern restrictions under section 9907.