II 

118TH CONGRESS 

2D SESSION S. 4585 

To prohibit covered entities that receive financial assistance relating to semiconductors from purchasing certain semiconductor manufacturing equipment from foreign entities of concern or subsidiaries of foreign entities 

of concern, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 18, 2024 

Mr. KELLY (for himself and Mrs. BLACKBURN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To prohibit covered entities that receive financial assistance 

relating to semiconductors from purchasing certain semiconductor manufacturing equipment from foreign entities 

of concern or subsidiaries of foreign entities of concern, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘The Chip Equipment 

5 Quality, Usefulness, and Integrity Protection Act of 

6 2024’’ or the ‘‘Chip EQUIP Act of 2024’’. 


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1 SEC. 2. PURCHASES OF SEMICONDUCTOR MANUFAC2 TURING EQUIPMENT. 

3 (a) DEFINITIONS.—Section 9901 of the William M. 

4 (Mac) Thornberry National Defense Authorization Act for 

5 Fiscal Year 2021 (15 U.S.C. 4651) is amended— 

6 (1) by redesignating paragraphs (2), (3), (4), 

7 (5), (6), (7), (8), (9), (10), (11), (12), and (13) as 

8 paragraphs (3), (4), (6), (7), (8), (9), (10), (11), 

9 (12), (13), (14), and (15), respectively; 

10 (2) by inserting after paragraph (1) the fol11 lowing: 

12 ‘‘(2) The term ‘completed, fully assembled’ 

13 means the state in which all (or substantially all) 

14 necessary parts, chambers, subsystems, and sub15 components have been put together, resulting in a 

16 ready-to-use or ready-to-install item to be directly 

17 purchased from an entity.’’; 

18 (3) in subparagraph (A) of paragraph (4), as so 

19 redesignated, by striking ‘‘paragraph (2)’’ and in20 serting ‘‘paragraph (3)’’; and 

21 (4) by inserting after paragraph (4), as so re22 designated, the following: 

23 ‘‘(5) The term ‘ineligible equipment’— 

24 ‘‘(A) means completed, fully assembled 

25 semiconductor manufacturing equipment that is 

26 manufactured or assembled by a foreign entity 


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1 of concern or subsidiary of a foreign entity of 

2 concern and used in the fabrication, assembly, 

3 testing, advanced packaging, production, or re4 search and development of semiconductors; 

5 ‘‘(B) includes— 

6 ‘‘(i) deposition equipment; 

7 ‘‘(ii) etching equipment; 

8 ‘‘(iii) lithography equipment; 

9 ‘‘(iv) inspection and measuring equip10 ment; 

11 ‘‘(v) wafer slicing equipment; 

12 ‘‘(vi) wafer dicing equipment; 

13 ‘‘(vii) wire bonders; 

14 ‘‘(viii) ion implantation equipment; 

15 ‘‘(ix) chemical mechanical polishing; 

16 and 

17 ‘‘(x) diffusion or oxidation furnaces; 

18 and 

19 ‘‘(C) does not include any part, chamber, 

20 subsystem, or subcomponent that enables or is 

21 incorporated into such equipment.’’. 

22 (b) INELIGIBLE USE OF FUNDS.—Section 9902 of 

23 the William M. (Mac) Thornberry National Defense Au24 thorization Act for Fiscal Year 2021 (15 U.S.C. 4652) 

25 is amended by adding at the end the following: 


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1 ‘‘(j) INELIGIBLE USE OF FUNDS.— 

2 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

3 the Secretary shall include in the terms of each 

4 agreement with a covered entity for the award of 

5 Federal financial assistance under this section prohi6 bitions with respect to a project relating to the pro7 curement, installation, or use of ineligible equip8 ment. 

9 ‘‘(2) WAIVER.—The Secretary may waive the 

10 prohibitions described in paragraph (1) if— 

11 ‘‘(A) the ineligible equipment to be pur12 chased by the applicable covered entity is not 

13 produced in the United States or an allied or 

14 partner country in sufficient and reasonably 

15 available quantities or of a satisfactory quality 

16 to support established or expected production 

17 capabilities; or 

18 ‘‘(B)(i) the use of the ineligible equipment 

19 complies with the requirements set forth in the 

20 Export Administration Regulations, as defined 

21 in section 1742 of the Export Control Reform 

22 Act of 2018 (50 U.S.C. 4801); and 

23 ‘‘(ii) the Secretary, in consultation with the 

24 Director of National Intelligence or the Sec25 retary of Defense, determines the waiver is in 


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1 the national security interest of the United 

2 States. 

3 ‘‘(3) FOREIGN ENTITIES OF CONCERN.—Noth4 ing in this subsection shall be construed to waive the 

5 application of section 9907.’’. 

6 (c) CONFORMING AMENDMENTS.— 

7 (1) Section 48D(c)(1) of the Internal Revenue 

8 Code of 1986 is amended by striking ‘‘section 

9 9901(6) of the William M. (Mac) Thornberry Na10 tional Defense Authorization Act for Fiscal Year 

11 2021’’ and inserting ‘‘section 9901 of the William 

12 M. (Mac) Thornberry National Defense Authoriza13 tion Act for Fiscal Year 2021 (15 U.S.C. 4651)’’. 

14 (2) Section 50(a)(6)(D)(i) of the Internal Rev15 enue Code of 1986 is amended by striking ‘‘section 

16 9901(7) of the William M. (Mac) Thornberry Na17 tional Defense Authorization Act for Fiscal Year 

18 2021’’ and inserting ‘‘section 9901 of the William 

19 M. (Mac) Thornberry National Defense Authoriza20 tion Act for Fiscal Year 2021 (15 U.S.C. 4651)’’. 

21 (3) Section 5949(j)(5) division E of James M. 

22 Inhofe National Defense Authorization Act for Fis23 cal Year 2023 (41 U.S.C. 4713 note; Public Law 

24 117–263) is amended by striking ‘‘paragraph (7) of 

25 section 9901 of the William M. (Mac) Thornberry 


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1 National Defense Authorization Act for Fiscal Year 

2 2021 (15 U.S.C. 4651), as added by section 

3 103(a)(4) of the CHIPS Act of 2022 (division A of 

4 Public Law 117–167)’’ and inserting ‘‘section 9901 

5 of the William M. (Mac) Thornberry National De6 fense Authorization Act for Fiscal Year 2021 (15 

7 U.S.C. 4651)’’. 

Æ 


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