With the ongoing chip shortage, companies like Intel are looking to expand their production and hand over the contracts to chip manufacturers in China. Intel had reportedly planned of making silicon wafers in a Chengdu, China factory, but according to a new report from Bloomberg, the US White House has “strongly discouraged” the decision and canceled Intel's plan of expanding its production to China.
According to the report, the Biden administration has intervened and canceled Intel's move citing potential security issues. The report from Bloomberg says that Intel has since said that it has "no plans" of producing silicon wafers in China after having a discussion with government officials. Intel says that it is now considering “other solutions.”
Intel, in a statement to Bloomberg, said, “Intel and the Biden administration share a goal to address the ongoing industrywide shortage of microchips, and we have explored a number of approaches with the U.S. government." To comply with President Joe Bidden's administration’s goals, Intel might now look to manufacture chips in the US or Europe.
In the same report, Bloomberg has cited that the Biden administration is “very focused on preventing" China from using the US technology and investment to develop state-of-the-art capabilities" since it could "contribute to human rights abuses or activities that threaten U.S. national security."
Like other companies, Intel is waiting for the US government to pass the CHIPS Act. The CHIPS Act, if passed, would bring $52 billion in funding for domestic chip research and production. The Act, according to the report, could allow the US to compete with China and prevent "supply crunches" in the longer term. According to the White House, the purpose of the CHIPS bill is to “ensure less dependence on vulnerable supply chains, including with respect to semiconductors."
For now, Intel is staying away from producing chips in China, but if the bill isn't passed soon and the situation remains the same, the company could again ask the government to move its production to the Asian country.