PHOENIX, Nov 20 (Reuters) - A bipartisan group of U.S.

lawmakers introduced a bill on Thursday in the House that would

block the purchase of Chinese chipmaking equipment by CHIPS Act

grant recipients for 10 years.

The bill targets a range of chipmaking tools from complex

lithography equipment, like that produced by Dutch manufacturer

ASML, to machines that slice and dice the silicon

wafers on which chips are printed.

The bill was introduced in the House by Republican Jay Obernolte

and Democratic member Zoe Lofgren. In the Senate, Democrat Mark

Kelly and Republican Marsha Blackburn plan to introduce the bill

in December.

Passed under the Biden administration in 2022, the CHIPS Act

was designed to boost the U.S. chip manufacturing industry and

allocated $39 billion to spur the construction of new factories

and expand existing facilities.

Chip manufacturers such as Intel ( INTC ), Taiwan's TSMC

and South Korea's Samsung Electronics ( SSNLF ) have

received grants under the law, though the U.S. later converted

Intel's ( INTC ) grant money into an equity stake.

China has invested more than $40 billion in the chip

industry with a focus on manufacturing equipment, and the market

share of such equipment has grown substantially, according to

background material provided by the lawmakers.

U.S. chip equipment makers have grown concerned that export

restrictions on their tool shipments to China will lower sales

and hurt their ability to invest in research and development.

The use of CHIPS Act grant money to buy Chinese equipment has

compounded the issue.

The largest American chipmaking tool companies include

Applied Materials ( AMAT ), Lam Research ( LRCX ) and KLA

.

Though Chinese equipment is the main target of the

legislation, the bill also blocks tools from other nations of

concern such as Iran, Russia and North Korea.

There are exceptions carved out in the bill that include the

ability for the U.S. to grant waivers if specific tools are not

produced in the U.S. or by its allied countries.

The bill would only block imports to the U.S. and would not

affect the foreign operations of CHIPS Act grant recipients.