Industry sources say that the measure was a surprise and that it is unclear how it would be applied to companies, each of which will have to negotiate separate agreements with the U.S. government.
Share repurchases have helped keep investors happy during tumultuous market conditions in the chip industry, which have swung from shortage to glut in two years.
“I believe this is going to cause heartburn for companies," a second chip industry executive told Reuters, requesting anonymity to discuss sensitive matters.
“It’s pretty odd for a foreign company to accept this kind of meddling in its business," said a third chip industry source.
A more onerous issue is that building new chip plants will probably get more expensive in the U.S., where costs are already higher than industry centers such as Taiwan and Singapore.