Chip Equipment Quality, Usefulness, and Integrity Protection Act of 2025; Chip EQUIP Act
Summary
The Chip Equipment Quality, Usefulness, and Integrity Protection Act of 2025 (Chip EQUIP Act) aims to restrict the purchase of certain semiconductor manufacturing equipment from foreign entities of concern and their subsidiaries. This bill amends the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 to define 'ineligible semiconductor manufacturing equipment' and prohibit the use of federal funds for its procurement, installation, or use. Waivers are possible under specific conditions, such as lack of domestic availability or national security interests.
Expected Effects
The Chip EQUIP Act will likely lead to a shift in the supply chain for semiconductor manufacturing equipment, encouraging domestic production and reducing reliance on foreign entities of concern. This could increase costs for semiconductor manufacturers in the short term but enhance national security and long-term competitiveness. The act also introduces a waiver process that allows for flexibility in cases where domestic alternatives are not available or when a waiver is in the national security interest.
Potential Benefits
- Strengthened national security by reducing reliance on foreign entities of concern for critical technology.
- Potential growth in the domestic semiconductor manufacturing equipment industry.
- Increased transparency and oversight in the procurement of semiconductor manufacturing equipment.
- Incentivizes allied and partner countries to increase their production capabilities.
- Protects intellectual property and sensitive technological information.
Most Benefited Areas:
Potential Disadvantages
- Potential increase in costs for semiconductor manufacturers due to limited supply options.
- Possible delays in semiconductor production if waivers are not granted promptly.
- Risk of retaliatory measures from foreign entities of concern.
- Complexity in defining and enforcing the terms 'foreign entity of concern' and 'subsidiary'.
- Potential for bureaucratic hurdles in the waiver process.
Constitutional Alignment
The Chip EQUIP Act aligns with the constitutional mandate to provide for the common defense (Preamble). Congress has the power to regulate commerce with foreign nations (Article I, Section 8, Clause 3). The Act's focus on national security and economic competitiveness is consistent with the general welfare clause (Preamble).
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).