The U.S. Department of Commerce rolled out its final rule on Friday outlining strict ‘guardrails’ for recipients of the U.S. CHIPS and Science Act funding. According to the department, beneficiaries must not materially expand their semiconductor manufacturing capacity in designated “foreign countries of concern” for 10 years from the award date. Such “material expansion” implies any increase in a facility’s production capacity by more than 5% for advanced facilities and beyond 10% for legacy facilities.

This decision comes amid mounting security apprehensions over technological advancements potentially being used against the U.S. and its allies. The rule additionally highlights the classification of specific semiconductors as “critical” to U.S. national security, especially those with properties essential for niche applications like quantum computing and specialized military capabilities. “These guardrails will protect our national security and help the United States stay ahead for decades to come,” said U.S. Secretary of Commerce Gina Raimondo, emphasizing the Biden administration’s intent.