Lead Japan has pledged roughly $36 billion in investments across the United States at the same moment U.S. regulators have tightened export controls on semiconductors and other sensitive technologies. That pairing — large allied capital flows alongside sharper export enforcement — is reshaping where projects get built, how deals are structured, and what companies must do to avoid costly legal and operational setbacks.
Why this matters now Two forces are converging. On one side, Japan’s capital is being directed at projects meant to shore up energy and raw-material security — critical minerals, power generation and conventional oil-and-gas infrastructure. On the other, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has stepped up enforcement and adjusted licensing rules that affect semiconductors, dual-use equipment and cross-border transfers. The result is a new operating environment where investment incentives and national-security controls are being negotiated in the same contract.
What happened – Japan’s investment pledge: The $36 billion commitment is intended to strengthen supply chains and energy resilience in the United States by funding mining, generation projects and infrastructure that support long-term industry needs. – Regulatory tilt: BIS has introduced a series of rule changes and heightened scrutiny for exports of advanced computing and manufacturing equipment. Notably, BIS announced case-by-case licensing reviews for certain high-performance accelerators and closed loopholes that previously eased transfers to some foreign fabs. – High-profile enforcement: On February 12, BIS reached a settlement with Applied Materials and Applied Materials Korea requiring about $252 million in penalties for shipments of ion implanters routed to a Chinese entity on the Entity List. The fine — roughly twice the declared transaction value — underscores the risk of routing controlled items through third countries.
How this will reshape deals and supply chains – Projects will carry tighter compliance hooks. Expect investment agreements to include detailed export-control covenants, conditional funding tied to licensing approvals, and explicit clauses governing routing, recordkeeping and audits. – Due diligence will deepen and cost more. Legal and procurement teams must now factor regulatory risk into early-stage models: longer licensing timelines, enhanced vendor screening, and potential restrictions on technology transfers. – Corporate groups are in scope. Recent BIS policy moves broaden affiliate coverage, meaning majority-owned subsidiaries can be treated like listed entities. Ownership structures and contractual arrangements will be re-examined accordingly.
Regulatory highlights companies should track – Case-by-case reviews for advanced accelerators (BIS cited examples such as the Nvidia H200 and AMD MI325X). – Closure of certain validated end‑user pathways that previously expedited imports to foreign fabs. – Expanded affiliate coverage on the Entity List, increasing the reach of restrictions to corporate groups and subsidiaries. – Enforcement posture that treats intermediary transshipments and documentation failures as serious violations.
Practical steps for companies and investors – Bring compliance into deal design. Draft contracts with clear export-control obligations, approval triggers, and remediation paths tied to licensing outcomes. – Harden screening and recordkeeping. Deploy automated tools for sanctions and end‑user checks, and create auditable trails for transactions and shipments. – Build independent verification into procurement. Where required, secure third‑party testing, capacity-preservation assurances, and documented technical safeguards. – Allocate compliance resources early. Budget for specialized legal support, compliance audits, and staff training — especially when deals involve cross-border transfers or third-country routing. – Reassess ownership and supply-chain ties. Map subsidiaries, joint ventures and key suppliers to identify exposure under expanded affiliate rules.
What policymakers and investors should watch – Further alignment among allied governments on export controls and investment screening, which can create standardized expectations — and shared burdens — for multinational projects. – Additional enforcement actions and rule clarifications from BIS that will refine what “reasonable” compliance looks like in practice. – How funding from allies like Japan translates into on-the-ground projects: capital alone won’t guarantee resilient supply chains unless matched with predictable, transparent regulatory processes. Companies that integrate robust, verifiable compliance into their commercial strategies — from contracts to audits to independent testing — will face fewer surprises and preserve access to sensitive technologies. For investors and policymakers, the test is whether capital and conditions can be synchronized so projects proceed without triggering regulatory friction that undermines their intended security and economic benefits.