Intel fab in China gets red light from Biden administration

Sources close to Intel told Bloomberg that the chip maker was strongly discouraged by the White House to expand its production capacity in Chengdu, China. The plan was pitched as a way to help to alleviate the global chip shortage and the extra production capacity could have been online by the end of 2022.

The Biden administration reportedly nixed the plan as it wants to reduce reliance on foreign suppliers. The Bloomberg piece points out that like other chip companies, Intel is eagerly waiting for the US Congress to pass $52 billion in funding for domestic research and manufacturing.

When presented with the plan in recent weeks, Biden administration officials strongly discouraged the move, the people said.

The situation underscores the challenges of the chip shortage, which has hobbled the tech and auto industries, cost companies billions in lost revenue and forced plants to furlough workers. The administration is scrambling to address constraints, but it’s also trying to bring production of vital components back to the U.S. -- a goal Intel’s China plan didn’t serve.