White House rejects Intel's plan to boost chip production in China
White House rejects Intel's plan to boost chip production in China

For security reasons, the Biden administration rejected Intel's plan to increase production in China, thwarting the idea of ​​solving the chip shortage in the United States.

Intel, the world's largest chip maker, has offered to use a plant in Chengdu, China, to manufacture silicon chips.

The product could have been operational before the end of 2022, helping alleviate the global supply crisis. But at the same time he is asking the federal government to help boost research and production in the United States.

When the plan was proposed in recent weeks, Biden administration officials vehemently opposed the move. This highlights the challenge of chip scarcity, which has weakened the tech and auto industries and cost the company billions of dollars in sales.

The government is working hard to lift these restrictions. But he is also working hard to bring key components back to the United States. The goal that the Chinese plan of Intel failed to achieve.

Intel said in a statement that it remains open to other solutions that will also help meet the high demand for innovative and economically indispensable semiconductors.

"The shared goal of the Intel and Biden management is to address the ongoing shortage of microchips," the company said. We discussed various approaches with the US government. Our goal is to continue to significantly grow our existing semiconductor manufacturing business, and we plan to invest tens of billions of dollars in new plants in the United States and Europe.

The setback came when the White House debated whether to restrict some strategic investments in China. National Security Adviser Jack Sullivan said the government is studying a foreign investment screening mechanism and is working with allies to see what it might look like.

Biden government mentions potential security concerns

White House officials declined to comment on any particular deal or investment. But he said the government is putting too much emphasis on preventing China from using US technology, knowledge and investment to develop more advanced skills that could lead to activities that violate human rights or threaten US national security.

Like other chip companies, Intel is waiting for Congress to spend $52 billion to fund research and domestic manufacturing. The bill, known as the CHIPS Act, has been in the House of Representatives for several months.

President and Commerce Secretary Gina Raimondo suggested the measure to compete with China and avoid a long-term supply crisis.

As the company needs public funding to ramp up production, management's opinions have some bearing on how Intel continues to evolve.

After talks with government officials, Intel announced that it currently has no plans to produce silicon chips in China, but is looking at other solutions.

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