Intel's plans may be affected by President Biden's domestic production and security efforts. According to Bloomberg sources, the White House discouraged Intel from increasing chip production in China in order to address shortages. Although the improved capacity might have been available by the end 2022, the Biden administration was concerned about security.
According to tipsters, the semiconductor company didn't rule out future Chinese production growth. Intel, however, is said to be "not planning" for the future.
Although Intel did not directly address the objection of the government in a statement they welcomed "other solutions" that would help to meet chip demand. The company had considered a number of options in conjunction with the US, including new wafer production in the US and Europe.
If accurate, this approach wouldn't surprise. Biden continued to be cautious about Chinese technology and signed a law that barred ZTE and Huawei from receiving FCC licenses. Although the source didn't provide details on Intel's security concerns, Pat Gelsinger, chief of the company, previously stated that a high dependence on Asian manufacturing was a threat to the supply chain. Historical concerns have been raised about companies sharing sensitive technology with China.
Even if security wasn't an issue economic development could be. Biden has advocated for increased manufacturing in the US to solve chip shortages. Intel's recent Chinese expansion would have reaffirmed that policy. It would also have hindered efforts to combat China's economic growth.
No matter what the reason, this change of heart could lead to chip shortages. Although Intel is building US plants, and may be asking for outside manufacturing assistance, these efforts could take some time and not cover all the shortfalls. Intel might have to accept a short-term loss of production in order to fulfill the White House's goals. This is especially true if it needs any factory-oriented funds under the CHIPS Act.
