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U.S. tech firms barred from building factories in China for 10 years


The U.S. has barred a section of the nation’s tech firms from building factories in China.

The new directive affects companies that will benefit from a $50bn fund that the government set aside to support and spur innovations.

U.S. secretary for  Commerce said, “We’re going to be implementing the guardrails to ensure those who receive CHIPS funds cannot compromise national security… they’re not allowed to use this money to invest in China, they can’t develop leading-edge technologies in China…. for a period of ten years,”

In August this year, President Joe Biden signed a law that avails  $280bn to high-tech manufacturing and scientific research, helping to curb concerns that the country is lagging behind China in technological advances.

In addition to the investments, the government also offered tax breaks for companies building computer chip manufacturing plants in the United States.  Production of computer chops in the United States has declined from 40% in 1990 to only 10%.

The U.S. has started a crackdown on firms selling technology to foreign countries. Last month, Nvidia and AMD were ordered by US officials to halt the sale of artificial intelligence chips to China.

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Simon W Nderitu

Simon is a tech enthusiast who keeps a close eye on emerging technologies, startups and the general business environment. You will often catch him totally immersed and drooling over Artificial Intelligence, Machine Learning, Virtual Reality, Augmented Reality, IoT and just about any other tech that promises to revolutionize the way we live. Send tips to snderitu@techtrendske.co.ke

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