CHIPS Act 'Guardrails' Bring Uncertainties For Chipmakers

CHIPS Act 'Guardrails' Bring Uncertainties For Chipmakers

August 19, 2022, Law360

Jonathan Wakely spoke to Law360 regarding the newly passed CHIPS and Science Act of 2022 and the law’s novel "guardrail" provisions. The first-of-their-kind provisions introduce federal limitations on outbound investment with a goal to strengthen U.S. competitiveness, in part by limiting the availability of advanced technology to China and other federally designated "countries of concern."

The article mentions how Jonathan sees opportunity for flexibility in the guardrails' open-ended parameters, similar to the discretion exercised by the Committee on Foreign Investment in the United States, which vets acquisitions by foreign entities for potential national security concerns and proposes modifications to deals where it foresees trouble.

"The way I read the statute, it would allow the secretary of commerce to undertake that similar analysis, which is to look at the business, look at the risks, and tailor the agreement and potential mitigation measures to the particular facts and circumstances," Jonathan said.

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