White House reportedly challenges Intel's plan to increase chip production in China

Intel's efforts to accelerate chip production in China have reportedly been challenged by the Biden administration, according to a Bloomberg report. Sources close to the situation told Bloomberg that Intel proposes to make silicon wafers at its Chengdu, China factory, which could start production by the end of 2022. However, Intel's plans were "strongly discouraged" by White House officials due to potential security issues.

Because Intel needs to secure funding from the government to ramp up production, the administration's opinion carries some weight on Intel's path. As noted by Bloomberg, Intel said it currently has "no plans" to produce silicon wafers in China, after discussing it with government officials, and will instead consider "other solutions."

"The Intel and Biden administrations share a goal to address the ongoing industrywide shortage of microchips, and we have explored several approaches with the US government," Intel said in a statement to Bloomberg. One of these approaches may be to invest in factories to manufacture silicon wafers in the US and Europe, in line with the administration's goals of manufacturing essential components within the US.

The Biden administration is skeptical about China's use of the technology. Biden has recently expanded on existing policies from the Trump era that ban the government's use of China-based brands Huawei and ZTE, while simultaneously labeling both companies as threats to national security. Biden's newly-signed law prevents both brands from receiving licenses from the Federal Communications Commission. Additionally, Biden previously banned the sale of hacking tools to China and also banned US investments in Chinese surveillance companies.

It seems that global chip shortages are spreading to more areas of technology every day. With Tesla reportedly shipping without a USB port, the new BMWs coming without a touchscreen, and with production cuts for the Switch, PS5 and iPhone 13, it's starting to look like Intel's prediction may be right; We may not see the end of chip shortages until 2023.