Intel Fab Expansion in China Allegedly Discouraged by White House

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One of Intel's best hopes to quickly bring online semiconductor manufacturing capacity has seemingly bit the dust. Citing sources close to the situation, Bloomberg reports that the White House "strongly discouraged" an Intel-proposed plan to add manufacturing capacity. The issue? The factory is located in Chengdu, China. Despite the well-known ongoing shortages in the semiconductor industry, it seems there are some political lines that are not to be crossed.

The Biden Administration is reported to have shown a strong negative sentiment towards any sort of semiconductor investment within China's borders. The reasons for that would be many, and security concerns are certainly one of them. 

However, there's also the matter of China's increasing investment in semiconductor technologies. The country famously included "semiconductor sufficiency" in its 14th five-year plan (2021-2026). Besides heavily investing in state-sponsored semiconductor electronics companies and increasing internal chip output to more than 1 billion a day, China has also been strongly pursuing intellectual property registrations - which do include patents related to semiconductor manufacturing

China also controls most of the rare metal production in the entire planet: 55% of global rare earth mining output is China's, and 85% of all rare earth minerals have to go through the country in one way or another throughout their semiconductor manufacturing process. It's a delicate situation, let's say.

The ongoing trade war between the countries does nothing to reduce the tension here. And since at least part of Intel's investment in capacity expansion is being funded by the U.S. government itself, it's understandable that other "solutions" would better be located in the U.S. or Europe.

“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,” Intel said in a statement to Bloomberg. Bloomberg notes Intel said it currently has “no plans” to increase production in China after meeting with government officials, and that it will pursue “other solutions.” 

That Intel even proposed a solution in China may be a testament to how advantageous it would be compared to other, less politically sensitive options. It's reported that the factory expansion would be complete by the end of 2022, and the investment would almost certainly see faster returns in China compared to any U.S. or Europe-based option. And remember: Intel went in with a plan.

It seems some additional relief for the stifled semiconductor industry may have been postponed just slightly longer, at least until Intel brings in a more appealing solution. Until then, shortages will likely continue to be a part of the marketplace.

Francisco Pires
Freelance News Writer

Francisco Pires is a freelance news writer for Tom's Hardware with a soft side for quantum computing.

  • DonQuixoteIII
    When there is mistrust on both sides, things will not go well. The US has supposedly back-doored many things, from HP Laser printers to Cisco routers. China has supposedly back-doored Huawei kit. Given the political tensions, it is clear that the interests of the State outweigh the interest of business entities Adams be damned, the politics will re-make the marketplace.

    Actually, in the long run this will be an advantage as we will end up with two aggressive entities, each trying to out-compete the other, for real. IFF the markets do ever converge, there will be a leveling of the playing field such as the world has never seen.
  • hotaru251
    TBH why the fk would you do this?

    after the ARM china was stolen why would any company actually trust the place anymore until laws are in palce to punish those who steal entire companies????
  • PapaCrazy
    Intel is battling to defend themselves against China's FinFET copyright scam, but they want to build a new fab there? Absolutely senseless. China is gutting our industries one IP theft at a time, I'm disgusted with their lack of ethics, but I'm even more disgusted with American industry's lack of spine.
  • Endymio
    Given that the only source on this is an anonymous contact to a Bloomberg reporter, I'd take this reporting with a grain of salt. I would imagine Intel's decision to not move forward with expanding China production was theirs and theirs alone, and had nothing to do with any WH meeting.
  • InvalidError
    Between the power shortages in China, the real-estate debt crisis, China whipping up resentment against foreign corporations and making their life miserable in general, it would make more sense to look into bailing out of China like many other foreign companies are in the process of than invest more over there.
  • PapaCrazy
    traxxmy said:
    As an asian, i am disgusted at American arrogant like they are the only one that can invent and the world owe them. Talk about ethics like how America can even phone tap their own allies or going to place where they do not belong to. Now i see made in america, i try to avoid as much as i could. Luckily here there is not much made in america stuff as America is not a manufacturing powerhouse like it use to and i glad it come to this

    Don't group China in with the entire Asian continent. They are as likely to steal from Korea or Japan as they are from the US.

    Here, you can give PRC's 'great firewall' a run for its money:
  • Nobonita Barua
    PapaCrazy said:
    China is gutting our industries one IP theft at a time, I'm disgusted with their lack of ethics, but I'm even more disgusted with American industry's lack of spine.
    Biggest joke of last 2 century.
    "Our industry"? American industry?
    Which industry is it? Red indian industry? Comanche industry? Apache?
    It is quite a funny thing when a global thief desperately try to save itself when fate comes back to it.
  • Nobonita Barua
    PapaCrazy said:
    Don't group China in with the entire Asian continent. They are as likely to steal from Korea or Japan as they are from the US.

    Here, you can give PRC's 'great firewall' a run for its money:
    Isn't this cute?
    Diplomat, CNBC, hrw(!!),hindustantimes, it reminds of of something it interesting the media are from countries that are former colonists which are now in desperate democratic dress up mode?
    We all know what US is made of.
    Shall we dig deeper? i told, US is not a country, it never was. It is a bankrupt entity with 360 million share holders.
    HRW you say?
    Anybody remember this? Little US, the little leader wannabe there an ounce which is not stolen in US? guess not,but wait,it gets even better, because people of USA are concerned, very concerned about human rights, well, more about rights than human itself, they were just self defending, in Syria.
    wait a minute, they are not finished being concerned, of USA are so concerned about others, they always like to keep a tab, they also like to get paid for selling the security though back in their rented home what people of US not of A has gobbled up a little bit of territory in Native america and swallowed guam, Hawaii , mexican land, people of US are good for world. Because they are biggest source of cheap entertainment.

    I don't know which one is worse, the illegitimately bred entity that is desperately trying to conceal how it came into being?
    Or it's shareholding people trying to conceal how incompetent they are, by playing democratic dress up & pretending to fix government every time. Do they really think their freedom of speech, chosen,voted government is gonna save them from what's coming.

    I have always wanted to meet the people who have been standing up for me for other side of the world, i have never met them. It is time. We were not here 2 centuries ago. But we are here now. I am very excited to meet the leader wannabes.

    I love US government, my problem is with their people.After all, you are a democracy, by people, of people for people --- On people.
  • Nobonita Barua
    Endymio said:
    The majority of Chinese theft and industrial espionage in the semi industry isn't directed against America any more, but rather Taiwan. Remind me again what continent the nation of Taiwan is in? Oh yeah-- Asia.

    The PRC employs hundreds of thousands of people whose job is, among others, to mount a sophisticated PR campaign: through carefully worded news stories, social media posts, and countless other sources, they've managed to convince many idealistic young Chinese that's what's good for the PRC is good for the Chinese people. This couldn't be further from the truth. You've been sold a bill of goods, sonny.

    Here's the people you're defending

    Chinese tennis star Peng Shuai disappears after accusing top PRC official of forcing her to have sex: London Times
    Secret Documents Reveal How Chinese Internment Camps Work: AP News.
    That is so cute.
    "Secret documents reveals China...."
    There are 3 universal truth.
    All paranormal activities always take place in US
    All UFOs, & Aliens always land in US
    All kinds of secret documents about China are revealed in US .

    Talking about truth, how is the grabbing thing coming out?
    By the way about the Peng Shuai, all hail Almighty China.
    They seem to have great godly power of disappearing then re -appearing people at will.
    Michael Hasting would be damned he wasn't Chinese