White House rejects Intel plans to increase chip production in China

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Intel’s plans to ramp up chip production in China may have been rejected by the White House. This is reported by anonymous sources to Bloomberg. The US government is said to have done so for ‘security reasons’.

According to Bloomberg sources, Intel has proposed using a factory in the Chinese city of Chengdu to produce wafers. That factory could become operational by the end of 2022, helping to tackle global chip shortages.

Intel recently presented its Chinese plans to the White House, according to Bloomberg. The Biden administration is said to have “strongly discouraged” the move, sources familiar with the discussions said. Following those talks, Intel is said to have scrapped the plans. “Intel has no plans to expand production in China at this time, after consulting with Biden’s team,” an unnamed source told the news agency.

Intel will not immediately confirm the talks with the White House, but it does report to Bloomberg that it is “open to other solutions to address the current chip shortage.” The White House also declined to comment, but said the US administration is “very focused on preventing US technologies, knowledge and investments” from being used by China to develop its own capabilities.

Intel has been working on expanding its chip production activities for some time, including in Europe and the US. The company is currently building two chip plants in Arizona, and plans to build more new plants in North America. Intel is seeking support from the US government for this. That government is currently working on a Chips Act that will provide $52 billion in funding for the chip sector, although that bill has been in Congress for several months now. The opinions and statements of the White House will therefore influence Intel’s decisions.

The White House’s position comes as no surprise. US President Biden is regularly critical of China and recently signed a law banning Huawei and ZTE from obtaining licenses from the Federal Communications Commission, barring the companies from supplying equipment to the US telecom sector.

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