The White House reportedly discouraged Intel from increasing chip production in China

President Biden’s security and domestic production efforts could have a marked impact on Intel’s plans. Bloomberg sources claim the White House “strongly discouraged” Intel from increasing chip production in China to help address the chip shortage. Improved capacity could have been available before the end of 2022, but the Biden administration was reportedly concerned about security concerns.

The semiconductor firm has not completely ruled out a future increase in Chinese production, according to tipsters. However, Intel is believed to have “no plans” at the moment.

Intel did not directly acknowledge the government’s objection in the statement, but welcomed “other solutions” that will help meet demand for the chips. The company considered a “number of approaches” in tandem with the United States, including the production of new tiles in the United States and Europe.

This approach would not be surprising, if correct. Biden continued to be wary of Chinese technology, going so far as to sign a law banning Huawei and ZTE from accepting FCC network licenses. Although sources did not specify security issues with Intel, company chief Pat Gelsinger said earlier that high dependence on Asian production posed a threat to the supply chain. There has also been a historical concern that companies are improperly sharing sensitive technology with China.

Even if security is not an issue, economic development could be a factor. Biden advocated increasing production in the U.S. to address the chip shortage, and Intel’s report of Chinese expansion would run counter to that policy. It would also not help attempts to counter China’s growth as an economic superpower.

Whatever the reasons, such a change of mind also risks prolonging the chip shortage. As Intel builds factories in the U.S. and seeks outside production assistance, those efforts will take time and may not cover every shortcoming. Intel may have to accept a short-term blow to production to meet White House goals, especially if it wants any factory-oriented funds from the stalled CHIPS law.

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Naveen Kumar

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