US government halts Intel’s plan to bolster chip production in China

The Biden administration has rejected Intel’s proposal to enhance chip production in China due to strong hesitations about national security. Intel originally planned to produce silicon wafers in a facility in Chengdu, China. The tech company aimed to alleviate the supply chain issues in the US and requested federal aid to accelerate production. However, government officials were vehemently against the proposal.

The ongoing chip shortage has greatly hindered many tech and auto industries and resulted in the loss of jobs and profits. The US government emphasised that its goal is to resolve supply deficiencies while also revamping domestic manufacturing. Consequently, President Biden has put forward the CHIPS Act to allocate US$52 billion for local research and production to compete with China. Intel’s project in China poses a direct contradiction to this goal.

Furthermore, the Whitehouse is deliberating whether specific investments in China should be limited; and the National Security Advisor stated that officials are contemplating executing an outbound investment screening process. The US government is concerned that China will adopt the country’s leading-edge technologies, which may foster human rights abuses or endanger national safety.

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